What is the role of price controls in the market economy?
a) Price controls are used to make markets more efficient
b) Price controls are a tool used by business firms to fix prices
c) Price controls are nearly always effective in eliminating shortages
d) Price controls are used by governments to reallocate resources more equitably
Ans: d) Price controls are used by governments to reallocate resources more equitably
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Economists argue that individuals should continue to consume until total benefit equals total cost
Indicate whether the statement is true or false
An example of someone bearing the burden of a negative consumption externality would be
A) Taylor living downwind from a feedlot. B) LaShawn grows beautiful roses in her garden. C) Jess's roommate smokes and she doesn't. D) All of these are examples of someone bearing the burden of a negative consumption externality. E) None of these is an example of someone bearing the burden of a negative consumption externality.
When final sales are larger than GDP,
a. inventories did not change. b. a net increase in inventories took place. c. a net decrease in inventories took place. d. the direction of any net change in inventories is uncertain.
During the short-run period of the production process, a firm will be
a. unable to vary any of its factors of production. b. able to vary only some of its factors of production. c. able to vary all of its factors of production. d. able to vary the size of its plant.