A new kind of consumption good, the “smidget” is invented in…
A new kind of consumption good, the “smidget” is invented in Econland. Suppose that the impact of the invention on the widget market is that the price Pwidget decreases while the quantity Qwidget remains unchanged. A possible explanation for why this happened is that widgets and smidgets are __________ and the supply curve for widgets is __________.
Read DetailsWhich of the following statements are true about the deadwei…
Which of the following statements are true about the deadweight loss of a tax? (i) It tends to be larger when taxes are larger. (ii) It is zero when supply is perfectly inelastic. (iii) It is zero when demand is perfectly inelastic.
Read DetailsConsider the market for housing. Suppose that after a decrea…
Consider the market for housing. Suppose that after a decrease in consumer’s income, the price of houses fell down while the quantity of houses remained the same. Which of the following is a possible explanation for why this happened?
Read DetailsConsider public transportation, namely the subway trains in…
Consider public transportation, namely the subway trains in New York city. Suppose consumers’ income increases and that, as a result, the equilibrium quantity Qtrain remains unchanged, and the price Ptrain decreases. Which of the following is a possible explanation for why this happened?
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