Government intervention can increase total welfare when
A) there are costs or benefits that are external to the market.
B) consumers do not have perfect information about product quality.
C) a high price makes the product unaffordable for most consumers.
D) all of the above
E) A and B only
E
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The exchange rate changed from € 2.5/ $ to € 2.0/ $. Therefore:
a. The euro appreciated by 25% and the dollar depreciated by 25%. b. The euro depreciated by 25% and the dollar appreciated by 25%. c. The euro appreciated by 20% and the dollar depreciated by 25%. d. The euro appreciated by 25% and the dollar depreciated by 20%. e. The euro depreciated by 25% and the dollar appreciated by 20%.
Why does this graph show a decrease in income?
a. Area a + c is greater than area b + c.
b. Area b + c is less than area a + b.
c. Area a + b is greater than area a + c.
d. Area b + c is equal to area a + b.
Exhibit 17-2 Aggregate demand and aggregate supply curves
As shown in Exhibit 17-2, if people behave according to adaptive expectations theory, an increase in the aggregate demand curve from AD1 to AD2 will cause the economy to move:
A. directly from E1 to E3 and then remain at E3. B. directly from E1 to E2 and then remain at E2. C. from E1 to E2 initially and then eventually move back to E1. D. from E1 to E2 initially and then eventually move to E3.
Which of the following federal agencies is NOT engaged in social regulation?
A. Environmental Protection Agency B. Federal Deposit Insurance Corporation C. Federal Trade Commission D. Food and Drug Administration