According to your text, when a shortage exists,
A) buyers compete with buyers.
B) buyers compete with sellers.
C) sellers compete with sellers.
D) the price of the good would tend to fall in order to eliminate the shortage.
A
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Suppose that the government enacts a tax on Good X. In order to estimate the effect of the tax on the quantity demanded of a related good, Good Y, we can use the concept of the:
A) price elasticity of demand. B) income elasticity of demand. C) cross-price elasticity of demand. D) cost elasticity of demand.
If a nation has an absolute advantage in the production of some commodity, it
A. can gain only if it has a comparative advantage in the commodity. B. may still gain from trade in the commodity. C. cannot gain from trade in the commodity. D. cannot gain unless it has an absolute advantage in every other commodity.