In an effort to protect endangered species from the effects of logging in America's national forests, the federal government passes a law prohibiting logging in most of the state of Washington
Which of the figures above best illustrates the effect of this new law?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) None of the above because a prohibition cannot be illustrated using demand and supply figures.
C
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If the income-expenditure multiplier equals 4, and a 1 percent increase in the real interest rate reduces autonomous spending by 100 units, then a 1,000 unit recessionary gap can be eliminated by ________ the real interest rate by ________ percent.
A. increasing; 2.5 B. decreasing; 2.5 C. increasing; 10.0 D. increasing; 4.0
The figure above shows a perfectly competitive firm. The firm will shut down in the short run if total fixed costs
A) are between $201 and $400. B) exceed $401. C) are less than $200. D) exceed total costs.
Assume a firm lowers price below marginal cost to deter entry
A) This strategy is not credible. B) This strategy is credible. C) This strategy is illegal. D) This strategy is immoral.
Which of the following is a key characteristic of economic freedom?
a. subsidies and regulations that favor business b. central planning c. reliance on open markets d. import quotas that protect domestic businesses from rivals