Economists believe that government regulation to prevent companies from making false or deceptive claims may be justified when:
A. consumers already have complete information about the product due to other market forces.
B. the equilibrium quantity and price are lower than they would be if consumers had complete information.
C. the equilibrium quantity and price are higher than they would be if consumers had complete information.
D. the equilibrium quantity and price are equal to the values they would take if consumers had complete information.
Answer: C
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Suppose an increase in the price of golf clubs from $75 to $125 leads to an increase in quantity supplied from 200 units to 300 units. The price elasticity of supply for golf clubs at the original price of $75 is ________, so supply is ________.
A. 2; inelastic B. 2; elastic C. 3/4; inelastic D. 4/3; elastic
Modern inventions, like the Internet or discoveries in genetics or materials science, seem to provide smaller gains to output than earlier inventions like the steam engine or the railroad
a. True b. False Indicate whether the statement is true or false
Demand for a food item increases by more than the supply of the food item. One thing for certain is that
A) the price of the food item rises. B) income elasticity of demand (for the food item) is greater than 1. C) the supply curve is price elastic. D) real income rises as a result. E) none of the above
If two resources are highly substitutable for one another:
A. a decrease in the price of one will increase unit costs of production. B. an increase in the price of one will increase the demand for the other. C. an increase in the price of one will reduce the demand for the other. D. a decrease in the price of one will increase the demand for the other.