In a market system, prices are used to coordinate economic activity.
Answer the following statement true (T) or false (F)
True
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Refer to the above table. Demand is unit elastic between the prices of
A) $5.00 & $10.00. B) $6.00 & $7.00. C) $6.00 & $6.50. D) $7.00 & $7.50
The aim of antitrust policy is to
a. provide adequate incentives for inventors and entrepreneurs. b. prevent firms from acquiring or exercising undue market power. c. prevent firms from becoming very large. d. regulate the prices charged by oligopolies.
Suppose that elementary education creates a positive externality. If the government subsidizes education by an amount equal to the per-unit externality it creates, then
a. the equilibrium quantity of education will equal the socially optimal quantity of education. b. the equilibrium quantity of education will be greater than the socially optimal quantity of education. c. the equilibrium quantity of education will be less than the socially optimal quantity of education. d. There is not enough information to answer the question.
Many economists argue that the most efficient way to control pollution is to
A. ban all activities that create pollution. B. enforce legal standards on air and water quality. C. promote environmental awareness among citizens. D. impose taxes on emissions.