(1)(2)(3)(4)(5)QdQdPriceQsQs5040$1070806050960708060850609070740501008063040Refer to the above table. In relation to column (3), a change from column (1) to column (2) would mostly likely be caused by:
A. consumers expecting that prices will be higher in the future.
B. government subsidizing production of the good.
C. reduced taste for the good.
D. an increase in input prices.
Answer: C
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Suppose an exhaustible resource can be sold only this period or next period. The resource owner is considering selling 100 tons of the resource this period
The future value of the resource when 100 tons are sold this period is less than the present value of the 100 tons sold this period multiplied by one plus the interest rate. What should the resource owner do? A) She should sell more than 100 tons this period. B) She should sell only 100 tons this period. C) She should sell less than 100 tons this period. D) She should not sell any of the resource in either period.
Which of the following statements about exchange is false?
a. The expectation of gain motivates people to engage in trade. b. If a party to a potential exchange does not believe that it will lead to personal gain, he or she can chose not to engage in the trade. c. Voluntary exchange is generally mutually beneficial to the trading partners. d. If one trading partner gains, the other must lose.