ECON 217 - II. True/False questions. Please, briefly...

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II. True/False questions. Please, briefly explain your choice to receive full credit (15 points) 1. A change in the price of carrots will cause a movement along the demand curve for substitute vegetables and a shift in the demand for carrots. 2. A price ceiling is in an essence a transfer of income from consumers to producers. 3. Most likely, the elasticity of demand for Levi jeans is greater than the elasticity of demand for clothing. III. Short-answer questions. Briefly explain your answer (19 points) 1. “In corn market, demand often exceeds supply and supply sometimes exceeds demand.” “The price of corn rises and falls in response to changes in supply and demand”. In which of these two statements are the terms “supply” and “demand” used correctly? Explain.
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2. A student makes the following arguments: “A price ceiling, on the other hand, increases the amount of a product that consumers buy, because it keeps the price below the competitive market equilibrium” Do you agree with student’s reasoning? Explain. You can use a demand and supply graph to illustrate your answer. 3. Suppose you own two Dominos Pizza franchises in your town. After reading the latest issue of
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ECON 217 - II. True/False questions. Please, briefly...

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