Import quotas on steel tend to result in higher quantities of steel being sold at lower prices than would be observed in the absence of a quota. Indicate whether the statement is true or false ANSWER False. The opposite is true. Quotas restrict the supply curve. This reduces quantity and raises price.
Date: September 9th, 2020
If a large number of people decide to major in economics, the supply and demand model has little to say about the future wages of economists. Indicate whether the statement is true or false ANSWER False. If more people major in economics, and the demand for economists does not change, the wages of economists […]
Date: September 9th, 2020
The military is NOT a perfectly competitive market because A) there is only one buyer, i.e., the government, for military goods/services. B) there is imperfect information, i.e., intelligence branches. C) there are heterogeneous goods/services because each military branch provides different goods/services. D) All of the above. ANSWER D
Date: September 9th, 2020
Suppose the market for a good is expressed as follows: Inverse demand: P = 200 – 2Q Inverse supply: P = 2Q What is the equilibrium if the government imposes a supply quota of 75 units? What is the equilibrium if the government imposes a supply quota of 25 units? What will be an ideal […]
Date: September 9th, 2020
What is one reason the supply and demand model might NOT be appropriate to the health-care industry? A) Consumers do not have full information. B) Providers do not know the demand for health-care services. C) Consumers do not know how to value their own health. D) The costs of finding a doctor are too low. […]
Date: September 9th, 2020
Suppose that firm A obtained a patent for a new medication that cures certain types of cancer. Which assumption of the supply-and-demand model does not hold in this example? A) Everyone is a price taker. B) Products are homogeneous. C) Trading costs are low. D) Everyone has full information about the price and quality of […]
Date: September 9th, 2020
The power of the supply and demand model lies in its ability A) to generally predict how price and quantity will change with supply and demand shocks. B) to precisely predict the impact of government regulations on quantity and price. C) to precisely determine the difference between price ceilings and price floors. D) to generally […]
Date: September 9th, 2020
The change in price that results from a leftward shift of the supply curve will be greater if A) the demand curve is relatively steep than if the demand curve is relatively flat. B) the demand curve is relatively flat than if the demand curve is relatively steep. C) the demand curve is horizontal than […]
Date: September 9th, 2020
Suppose the market for potatoes can be expressed as follows: Supply: QS = -20 + 10p Demand: QD = 400 – 20p Suppose the government restricts the quantity to 100 units. What will be the price of potatoes? What will be an ideal response? ANSWER (1 ) Find the inverse supply curve: p = […]
Date: September 9th, 2020
It is appropriate to use the supply-and demand-model if, in a market, A) everyone is a price taker with full information about the price and quality of the good. B) firms sell identical products. C) costs of trading are low. D) All of the above. ANSWER D
Date: September 9th, 2020
