There are a few Micro multiple choice questions where I can't figure out why the answer is correct.
Surely it does have opportunity cost in supply? If more free goods are supplied then there will be less resources to make other goods?
- A free good has which one of the following characteristics? (Answer: A)
- A It has no opportunity cost in supply.
- B It is generally supplied by the government because its consumption is considered tobe socially desirable.
- C It has no externalities associated with its consumption or production.
- D It is in perfectly inelastic supply.
A government imposes an indirect tax on a product. The price of the product is likely torise by the full amount of the tax if the price elasticity of (Answer: A)
- A supply is perfectly elastic.
- B supply is perfectly inelastic.
- C demand is unit elastic.
- D demand is perfectly elastic.
If supply is perfect elastic, then any change in price would cause demand to fall to 0. No producer would increase the price if there is going to be no demand?
Help with these multiple choice answers?
|Last day to win £100 of Amazon vouchers - don't miss out! Take our quick survey to enter||24-10-2016|