The government heavily subsidizes the production of ethanol to encourage the purchase of ethanol over oil, a less environmentally friendly form of energy. Given that the supply elasticity of ethanol, ?, is estimated to be about 0
13, what would the elasticity of demand, ?, have to be for consumers to receive at least half of the subsidy, and therefore encourage ethanol consumption? A) ? must be less than .
B) ? must be greater than .
C) ? must be more inelastic than the elasticity of supply.
D) Both A and C.
D
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Once international trade occurs, a country with a comparative advantage in the production of a good will ________ production of the good and ________
A) decrease; import the good B) increase; export the good C) not change; import the good D) increase; import the good E) decrease; export the good
The civil court system often relies upon
A. a judge and jury to resolve financial disputes among injured parties. B. attorneys who volunteer to defend the indigent accused of crimes. C. police enforcement of criminal statutes. D. a sentence of jail time as punishment.