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Which of the following would cause quantity demanded to change without changing the demand curve?
a. A change in income.
b. A change in the price of the good.
c. A change in tastes and preferences.
d. A change in the price of a substitute good.
b. Only a change in the price would enable us to move along the same demand curve without creating a new one.
2. Two economists are debating whether or not to remove a tariff on luxury vehicles. They agree that consumers will benefit by $5 billion and that the harm done to domestic businesses and workers will only be $4 billion. One argues these facts make it obvious that the tariff should be removed. The other disagrees. What would be a likely reason for the second economist to disagree?
d. He has different value judgments about the weights that should be put on the benefits and costs.
While economists can all agree on empirical data, they can value things differently. While society as a whole is better off without the tariff, there can be other reasons why an economist would favor a particular segment of society, and so would favor the tariff.
In the early 1990s, mounds of newspapers and worthless plastic piled up at recycling centers. As the nation's economy continued to grow, increased demand eliminated the mounds and turned them into shortages. In the mid-1990s, as recycling became more ...
Comparative advantage, marginal cost, marginal utility, etc.