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When a product is a necessity, a. it has few or no substitutes, and its demand will probably be elastic. it has many substitutes, and its demand...

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1. When a product is a necessity, a. it has few or no substitutes, and its demand will probably be elastic. b. it has many substitutes, and its demand will probably be elastic. c. it has many substitutes, and its demand will probably be inelastic. d. it has few or no substitutes, and its demand will probably be inelastic. 2. When demand is more elastic, a decrease in supply will cause a. equilibrium price to rise less, and equilibrium quantity to fall more. b. equilibrium price to rise less, and equilibrium quantity to fall less. c. equilibrium price to rise more, and equilibrium quantity to fall less. d. equilibrium price to rise more, and equilibrium quantity to fall more. 3. The article, "Scientifically Priced Retail Goods" (NY Times, 9/2/02), uses a cold weather example to illustrate factors that influence prices. If cold weather is approaching, a. a retailer might reduce the price of children's snow suits, to match the change in the weather. b. a retailer might not reduce the price of soup, since people's preference for hot soup might increase when the weather is cold. c. a retailer might not increase the price of snow shovels, because the demand for snow shovels is likely to increase when the weather is cold. d. a retailer might increase the price of swim suits, to make a higher profit on fewer sales. 4. The article, "Isaac brings unwelcome spike in gas prices as Labor Day weekend approaches" (Washington Post, August 29, 2012) offers several reasons why gasoline prices increased at the end of August. Among those reasons are a. Gulf Coast refineries avoided a sudden shutdown of operations due to Hurricane Isaac, inventories of gasoline were high, and people decided to stay at home during the Labor Day weekend. b. crude oil prices are falling, refineries are switching to their winter blends of gasoline, and the demand for jet fuel has increased as a result of the Labor Day travel season. c. Gulf Coast refineries managed to remain open in spite of Hurricane Isaac, the midwest drought has raised the price of ethanol-based fuel, and
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many people canceled their vacations to watch the political conventions on television. d. Gulf Coast refineries shut down because of Hurricane Isaac, a crude oil pipeline to the midwest was also shut down, and there is a surge of driving that takes place over the holiday weekend.
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1. When a product is a necessity, a. it has few or no substitutes, and its demand will probably be elastic. b. it has many substitutes, and its demand will probably be elastic. c. it has many...

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