micro4SG

micro4SG - Micro Chapter 4 Study Guide Questions Multiple...

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Micro Chapter 4 Study Guide Questions Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. An increase in the demand for a product will cause output to a. increase and both the demand for and prices of the resources used to produce the product to increase. b. increase and both the demand for and prices of the resources used to produce the product to decrease. c. decrease; the demand for the resources used to produce the product will remain constant. d. decrease; the price of resources used to produce the product will decrease. ____ 2. Which of the following is a true statement regarding the economic impact of a subsidy? a. The distribution of the benefits from a subsidy will depend on whether the subsidy is legally granted to the buyer or seller. b. When demand is relatively inelastic, the benefits of a subsidy will mainly accrue to sellers. c. When supply is relatively elastic, the benefits of a subsidy will mainly accrue to buyers. d. When demand is relatively elastic, the benefits of a subsidy will mainly accrue to buyers. ____ 3. During the imposition of price controls in the 1970s, long gasoline lines were common. In the absence of price controls, markets would have eliminated such excess demand by a. allowing the price to rise, so gas was rationed to those willing to pay the most for it. b. increasing the gap between supply and demand.
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micro4SG - Micro Chapter 4 Study Guide Questions Multiple...

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