Necessities tend to have inelastic demands, whereas luxuries tend to have elastic demands

Pollution occurs when lumber is produced. If the lumber market is unregulated, there would be

A) overproduction of lumber compared to the efficient amount. B) underproduction of lumber compared to the efficient amount. C) sometimes overproduction and sometimes underproduction of lumber compared to the efficient amount. D) an external benefit to producing lumber.

If the graph shown is displaying a competitive market and the market is currently offering a wage more than P*:

A. firms would have a hard time finding workers. B. there would not be unemployment in the market. C. equilibrium would be achieved. D. there would be a surplus of workers who want to work at that wage.