Economists Are Very Good at Explaining How Individual Markets Work

question 158

Multiple Choice

Economists are very good at explaining how individual markets work.Economists are less successful at explaining

• A)market pricing.
• B)recessions and inflation.
• C)central planning.
• D)business firm profits.

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Definitions:

Price Effect

The impact on the quantity demanded of a good or service due to a change in its price.

Quantity Effect

The change in the total amount consumed or produced of a good or service resulting from a change in its market price.

Entrance Fee

A charge for admission, often paid at the entrance of a facility, event, or establishment.

Price Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in its price; it quantifies the sensitivity of demand relative to price changes.