What situation gives rise to a surplus?
A) The market clearing price of the good is too high.
B) The current price of the good is below its market clearing price.
C) The current price of the good is above its market clearing price.
D) Supply of the good decreases, but the market price is not permitted to change.
C
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Refer to the scenario above. Instead of the price increase, if there is a fall in price from $6 to $4, the absolute value of Gary's arc elasticity of demand for shirts is:
A) 1.2. B) 2.14. C) 4. D) 5.
The capture theory of regulation states that _____
a. regulators act in the best interests of regulators b. regulators act in the best interests of politicians c. regulators act in the best interests of the general public d. regulators act in the best interests of the regulated