Using the above figure, CBL is the cost of breaking the law. What is the equilibrium price and quantity if beer is legal?
A) $5 per quart and 300 quarts of beer
B) $3 per quart and 500 quarts of beer
C) $3 per quart and 100 quarts of beer
D) $1 per quart and 300 quarts of beer
B
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A command system is a
A) method of organizing production that uses a market-like mechanism inside the firm. B) method of organizing production that uses a managerial hierarchy. C) set of rules that induce an agent to act in the best interest of a principal. D) method of production that implements an assembly-line process.
In the Keynesian model, a decline in interest rates will cause investment to
A) increase. B) decline. C) remain unchanged. D) move erratically, depending on the interest rate effect on saving.
Which of the following arguments for farm subsidies is most closely associated with the parity concept?
A. Although farmers produce necessities for the rest of us, they receive low incomes that are declining in real terms, and should therefore receive price and income support. B. Farmers sell their output in purely competitive markets but must buy inputs from imperfectly competitive firms. C. Farmers cannot fully insure themselves against the risks unusual to farming, such as floods, droughts, and pests. D. The "family farm" is an American institution that should be protected and nurtured.
In efficient markets, ________ flows toward ________ opportunities.
A. investment capital; profit B. consumption; profit C. investment capital; consumption D. consumption; investment