Which would be a better source of tax revenue for the government, a good with elastic or a good with an inelastic demand? Explain your reasoning.
What will be an ideal response?
Ques. 2Activity aimed at creating artificial barriers to entry into a particular market
A) is rent seeking.
B) has no social cost.
C) improves competition.
D) improves the economy's efficiency.
Ques. 3The fewer the number of substitutes for a good, the more elastic the demand for that good. Is the previous statement true or false?
What will be an ideal response?
Ques. 4Welding has changed dramatically over the last decade with more welding jobs dependent on the use of computers.
This change increased the demand for welders with computer skills and decreased the demand for welders who lack these skills and is an example of when technology is a ________ to a high-skilled job and a ________ to a low-skilled job. A) complement; substitute
B) complement; complement
C) substitute; complement
D) substitute; substitute
Ques. 5The table above provides information about the marginal social cost and marginal social benefit of street lights, which are a public good.
a) What quantity would a private company provide? Why?
b) What is the efficient quantity?
Ques. 6In the above figure, the indifference curves indicate that the two goods are
A) perfect complements.
B) perfect substitutes.
C) ordinary goods.
D) normal goods.
Ques. 7According to a behavioral economist, people who are unwilling to sell the last pound of rice they purchased for the same price that they paid for it are displaying ________.
A) the endowment effect
B) bounded rationality
C) bounded self-interest
D) bounded will power
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