Minimum wages are examples of
A) a price floor.
B) a price ceiling.
C) the rationing function of prices not working.
D) government increasing the demand for certain products.
Answer: A
Economics
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In the economic way of thinking, which statement makes the most sense?
A) Costs determine prices. B) Prices determine costs. C) Costs determine demand. D) Demand determines supply.
Economics
Suppose we estimate that the demand elasticity for fine leather jackets is -.7 at their current prices. Then we know that:
a. a 1% increase in price reduces quantity sold by .7%. b. no one wants to buy leather jackets. c. demand for leather jackets is elastic. d. a cut in the prices will increase total revenue. e. leather jackets are luxury items.
Economics