1. "A good with an inelastic demand would still be purchased even if the price changes D. Statement 1 is false, statement 2 is true substantially. A good with an inelastic supply has a significant response on price changes relative to production." 7. A good with an elastic supply is a necessity. The first statement is true at all times. A. Both statements are true B. Both statements are false A. Both statements are true C. Statement 1 is true, statement 2 is false B. Both statements are false D. Statement 1 is false, statement 2 is true C. Statement 1 is true, statement 2 is false D. Statement 1 is false, statement 2 is true 2. The second statement is false. Price floors serve as the going rate or benchmark price for goods and/or services 8. If government wants to earn more revenue, it should simply increase the tax imposed on a certain good. A large tax means large revenues for the government all the time. A. Both statements are true B. Both statements are false A. Both statements are true . Statement 1 is true, statement 2 is false B. Both statements are false D. Statement 1 is false, statement 2 is true C. Statement 1 is true, statement 2 is false Statement 1 is false, statement 2 is true 3. Deadweight losses mean lost gains in trade. Deadweight losses are similar with allocation inefficiencies. A. Both statements are true 3. Both statements are false C. Statement 1 is true, statement 2 is false D. Statement 1 is false, statement 2 is true 4. Markets that are efficient are always good. It is always bad for government to intervene in market activities. A. Both statements are true 3. Both statements are false C. Statement 1 is true, statement 2 is false D. Statement 1 is false, statement 2 is true 5. The second statement is false. A market economy allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services. A. Both statements are true 3. Both statements are false . Statement 1 is true, statement 2 is false . Statement 1 is false, statement 2 is true 5. Prices reflect the value of the good to a society. It should not reflect the cost to society of making the good - A. Both statements are true B. Both statements are false C. Statement 1 is true, statement 2 is false