What factors will determine the sizes of the shortages? The extent of the excess demand implied by the shortages will depend on
A. the amount by which quantity supplied exceeds quantity demanded, where the shortages will be larger the greater this difference. B. the elasticity of supply, where the shortages will be larger if more close substitutes are available. C. the elasticity of demand, where the shortages will be larger if demand is more inelastic. D. the amount by which price is set above market-clearing levels, where the shortages will be larger the greater this difference. E. the elasticities of supply and demand, where the shortages will be larger if both supply and demand are more elastic.
The answer is: C) the elasticity of demand, where the shortages will be larger if demand is more inelastic.
Explanation:
When the demand for a product is completely inelastic it means that the quantity demanded for that product will be the same whether its price increases or decreases. Rarely any product is completely inelastic, but inelasticity shows a tendency of buyers to keep buying a product even if its price rises, for example gasoline.
Inelastic products don´t follow the law of supply and demand, since the price doesn´t alter the demand.
If suppliers can produce enough goods (product shortages) and the quantity demanded stays the same, the price will rise. But if the demand for the product is inelastic then the shortage will get worse since every time more people will want to buy the product and their will be less product to buy.
The correct answer is: add exports but subtract imports in calculating GDP.
Explanation:
National income refers to the production of goods and services by the residents of a nation within the geographical boundaries of a nation in a given period.
In the calculation of national income, net exports are included. This net export is the difference between exports and imports. In other words, we can say that exports are added and imports are included.
Considering the situation described in the question, if the allegations were accurate, the rating error the staff identified is known as the "Similarity Bias" error.
This is because the Similarity Bias is a type of rating error where the rater rates a person or candidate higher than he deserves because they shared or have some similarities like having played for the same football team or attended the same school.
There are other types of rating bias that do not apply to this situation.
These include Halo bias and Leniency bias.
Hence in this case the correct answer is "Similarity Bias"
Economic theory assumes that people are rational when making economic decisions. This means that they will seek to make a decision that can satisfy them the most or give them the highest benefit.
This benefit does not always have to be monetary, it can also be emotional. The U.S. customers who prefer made in America products would therefore be emotionally satisfied by the decision of these manufacturing companies to move back to the U.S. and will patronize them more.
This decision to move back was therefore based on people being rational.
