Economic thinking suggests that a nation in which middlemen are considered to be unproductive seekers of profit, and where their activities are heavily restricted by law, will
a. gain by channeling people's efforts away from unproductive middleman activity toward physical output.
b. lose the potential gains from trade that would result from lower transaction costs emanating from middleman activities.
c. find that it is richer because the added transaction costs normally imposed by middlemen will be reduced.
d. gain because the value of total output will rise.
B
You might also like to view...
Technological efficiency, defined in terms of completely objective relationships,
A) has no useful meaning. B) influences the decisions of engineers but not of business executives. C) influences the decisions of engineers but not of economists. D) is more important in the long run than in the short run, where profitability tends to dominate decisions.
In the Cournot model, if the products are differentiated
A) this reduces the pressure of one firm's decisions on the other. B) this increases the pressure of one firm's decisions on the other. C) there is no difference between this model and one with homogeneous goods. D) marginal costs are necessarily different.
Prices can work to benefit the public interest by
A. raising corporate profit levels. B. improving the fairness of the distribution of income. C. allowing government to regulate the economy. D. allocating scarce resources to those who value the resource the most.
Which of the following is FALSE?
A) A common market is more deeply integrated than an economic union. B) NAFTA is an example of a free trade area. C) The European Union is a deeper form of integration than NAFTA. D) Common markets allow for labor mobility between participating nations.