Scarcity
A. used to be a problem, but is not an issue for modern industrial nations.
B. afflicts greedy people only.
C. exists in all human societies.
D. is a problem for less-developed nations only.
Answer: C
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The current international monetary system is best described as a: a. fixed exchange rate system. b. gold standard
c. dirty float system. d. free float system.
If a perfectly competitive firm raises its price,
a. the quantity demanded of its good falls because the firm faces a downward- sloping demand curve b. the quantity demanded of its good falls to zero c. new firms will enter, attracted by the higher price d. it loses some of its market share e. other firms in the industry must follow the leader
A shortage occurs whenever
a. quantity demanded exceeds quantity supplied at the equilibrium price. b. price is less than equilibrium price. c. quantity demanded is less than quantity supplied. d. goods are scarce. e. some of the people who need the product are not willing and able to buy it at the equilibrium price.
Figure 20-3
Figure 20-3 shows a worker’s backward-bending supply curve of labor. Which of the following statements is correct?
A. The substitution effect of a change in the wage dominates the income effect at all points on the curve. B. The income effect of a change in the wage dominates the substitution effect at all points on the curve. C. Above W*, the substitution effect of a change in the wage dominates the income effect; below W*, the income effect dominates the substitution effect. D. Above W*, the income effect of a change in the wage dominates the substitution effect; below W*, the substitution effect dominates the income effect.