The supply of a good will tend to be highly elastic if
A) additional resources to produce the good can be obtained quickly and with no increase in cost.
B) its price rises quickly and sharply when the demand increases.
C) the good has few close substitutes.
D) the good is generally classified as a luxury.
E) the good is generally classified as a necessity.
A
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The U.S. balance of payments status may improve when
A) the inflation rate increases in the United States relative to other countries. B) political instability in other countries increases. C) the world demand for U.S. products falls. D) the American government increases its spending on foreign aid.
Greater income equality that is achieved through the redistribution of income is thought to:
A. Stimulate innovation and entrepreneurship B. Promote economic efficiency in the economy C. Increase incentives to work, save, and invest in the economy D. Come at the opportunity cost of reduced production and income