Suppose the U.S. Drug Enforcement Agency steps up its efforts to control the illegal importation of cocaine into the United States. What is the likely effect on the market for illegal drugs in the United States?
a. The price of cocaine and the quantity imported will both increase.
b. The price of cocaine is likely increase and the quantity entering the country decrease.
c. The price of marijuana, a cocaine substitute grown domestically, will fall.
d. The policy will have the least impact on those individuals whose demand for drugs is elastic.
e. Demand for drugs is highly inelastic and these policies have little or no effect on consumption.
B
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Use the following graph showing the average total cost curve for a perfectly competitive firm to answer the next question.
At the long-run equilibrium level of output, this firm's total revenue
A. is $400. B. is $10. C. is $40. D. cannot be determined from the information provided.
What role does research and development play in increasing productivity?
What will be an ideal response?
The championship game will be held next weekend in your college's 40,000-seat stadium. The supply of tickets to the game:
A. depends on which teams make it to the championship game. B. is perfectly inelastic. C. will increase because the price charged will be higher. D. is elastic.
Among the characteristics of the command-and-control approach to pollution reduction is that it is
A. easily adjusted to changes in marginal costs of pollution reduction across firms. B. less costly than a carbon tax. C. typically inflexible and thus quite expensive. D. less costly than cap-and-trade systems.