If a company raises prices on a product with elastic demand, total revenues will probably decrease.

The large trade deficit that the United States has with China persists in part because:

A. the U.S. economy has grown slowly in recent years. B. China has fixed its exchange rate to a basket of currencies that includes the dollar, and has not allowed the yuan to appreciate relative to the U.S. dollar. C. China has experienced rapid economic growth over the past decade. D. China has recently imposed or increased tariffs on most goods imported from the United States.

Why do negative externalities like pollution result in inefficiency?

A. Because producers artificially restrict their supply. B. Because producers ignore the external costs they impose on third-parties. C. Because producers manufacture more goods than people can afford to buy. D. Because producers will receive an unequal distribution of profits.