Suppose that X and Y are substitute goods. If the price of good X increases, we can
Question:
Suppose that X and Y are substitute goods. If the price of good X increases, we can expect
a. | a downward movement along the demand curve for good Y | |
b. | an upward movement along the demand curve for good Y | |
c. | the demand curve for good Y to shift to the left | |
d. | the demand curve for good Y to shift to the right | |
e. | the demand for good X to shift to the left |
10 points
Which of the following represents a way that a government can help the private market to internalize an externality?
a. | taxing goods that have negative externalities | |
b. | subsidizing goods that have positive externalities | |
c. | Both answers are correct |
10 points
A positive externality arises when a person engages in an activity that has
a. | a beneficial effect on a bystander who pays the person who causes the effect | |
b. | an adverse effect on a bystander who is not compensated by the person who causes the effect | |
c. | an adverse effect on a bystander who is compensated by the person who causes the effect | |
d. | a beneficial effect on a bystander who does not pay the person who causes the effect |
10 points
15. If the price of trombones rises by 15 % while the quantity supplied rises by 3 %:
a. | a) The price elasticity of demand for trombones is 0.2 | |
b. | a) The price elasticity of demand for trombones is 5 | |
c. | a) The income elasticity of demand for trombones is 0.2 | |
d. | a) The price elasticity of supply for trombones is 5 | |
e. | a) The price elasticity of supply for trombones is 0.2 |
10 points
In accordance with the law of supply, both individual and market supply curves are drawn
a. | vertical | |
b. | upward-sloping | |
c. | downward-sloping | |
d. | horizontal |
Managerial Economics and Business Strategy
ISBN: 978-0071267441
7th Edition
Authors: Michael R. baye