The demand for salt is inelastic, and the supply of salt is elastic. The demand for caviar is elastic, and the supply of caviar is inelastic. Suppose that a tax of $1 per pound is levied on the sellers of salt, and a tax of $1 per pound is levied on the buyers of caviar. We would expect that most of the burden of these taxes will fall on

To increase their individual profits, members of a cartel have an incentive to

Which of the following would shift the supply of Green Bay Packers football jerseys to the left?

Figure 21-3 In each case, the budget constraint moves from BC-1 to BC-2. Refer to Figure 21-3. Which of the graphs in the figure reflects an increase in the price of good Y only?

Since the 1980s, Wal-Mart stores have appeared in almost every community in America. Wal-Mart buys its goods in large quantities and, therefore, at cheaper prices. Wal-Mart also locates its stores where land prices are low, usually outside of the community business district. Many customers shop at Wal-Mart because of low prices. Local retailers, like the neighborhood drug store, often go out of business because they lose customers. This story demonstrates that

In the long run a company that produces and sells laundry detergent incurs total costs of $2,500 when output is 1,250 units and $2,750 when output is 1,500 units. For this range of output, the laundry detergent company exhibits

Suppose that flower gardens create a positive externality equal to $1 per plant. What is the relationship between the equilibrium quantity and the socially optimal quantity of plants grown?

Holding all other factors constant and using the midpoint method, if a candy manufacturer increases production by 20 percent when the market price of candy increases from $0.50 to $0.60, then supply is

Figure 21-12 Refer to Figure 21-12. Which of the following statements is not correct?

Figure 15-4 Refer to Figure 15-4. If the monopoly firm wants to maximize its profit, it should operate at a level of output equal to