how economists are both scientists and policy makers and what principles society uses to allocate its scarce resources
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In any economic system, scarce resources have to be allocated among competing uses. Market economies harness the forces of
| a. | government to allocate scarce resources. | |
| b. | supply and demand to allocate scarce resources. | |
| c. | nature to allocate scarce resources. | |
| d. | credit cards to allocate scarce resources. |
The price elasticity of demand measures the
| a. | magnitude of the response in quantity demanded to a change in price. | |||||||||||||
| b. | size of the shortage created by the increase in demand. | |||||||||||||
| c. | direction of the shift in the demand curve in response to a market event. | |||||||||||||
| d. | responsiveness of quantity demanded to a change in income. If the price elasticity of supply is 0.4, and a price increase led to a 5% increase in quantity supplied, then the price increase is about
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Which of the following is the least likely to be a competitive market?
| a. | ice cream | |
| b. | soybeans | |
| c. | cable television | |
| d. | new houses |
Economists speaking like policy advisers make
| a. | claims about how the world is. | |
| b. | descriptive statements. | |
| c. | normative statements. | |
| d. | More than one of the above is correct. |
Economists speaking like scientists make
| a. | positive statements. | |
| b. | prescriptive statements. | |
| c. | claims about how the world should be. | |
| d. | More than one of the above is correct. |
A decrease in the price of a good will
| a. | increase quantity supplied. | |
| b. | decrease supply. | |
| c. | decrease quantity supplied. | |
| d. | increase supply. |
