How do price controls undermine the market as a communication device?
The imposition of price controls (which restrict prices above or below market clearing prices) sends incorrect signals to both consumers and producers about the relative scarcities of goods and services.
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The decision to innovate
A) depends on the marketing department's needs. B) depends on whether the firm wants to benefit its customers. C) is based on the marginal cost and the marginal revenue of innovation. D) is unnecessary in a monopolistically competitive market. E) None of the above answers is correct.
Consider a general Cobb-Douglas production function q = ALaKb
where A, a and b are positive constants. Using this production function, derive the short-run cost function for a fixed capital stock, K0, wage rate w, and capital rental rate r.
Considering the information in the table shown, if Jack consumes 2 popsicles and 2 ice cream cones:
This table shows the different combinations of goods that Jack can consume, given that his income to spend on these two items is $10.
A. Jack still has $4 left to spend.
B. Jack still has $6 left to spend.
C. Jack still has $8 left to spend.
D. Jack still has $2 left to spend
If an increase in the price of a product from $1 to $2 per unit leads to a decrease in the quantity demanded from 100 to 80 units, then demand is:
A. elastic. B. inelastic. C. unitary elastic. D. horizontal.