Unequal distribution of resources is one of the main reasons for international trade
a. True
b. False
Indicate whether the statement is true or false
True
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When an economy is experiencing a negative output gap, it means that the:
A. actual output is less than their potential output. B. actual output is more than their potential output. C. price level is rising. D. price level is falling.
In the absence of government intervention, find the equilibrium price (PC) and Quantity (QC) being exchanged in the antifreeze market?
Suppose you are a public official responsible for setting a retail disposal charge on antifreeze. Estimated marginal benefit and cost functions for antifreeze are as follows: MPB = 10.0 – 0.5Q MPC = MSC = 1.0 + 0.4Q MSB = 10.0 –1.1Q, whereMPB, MSB, and MPC are measured in dollars per gallon, and Q is in millions of gallons.
When the marginal cost is higher than the average total cost,
A. the average fixed cost must exceed the average variable cost. B. the average variable cost must also be higher than the average total cost. C. the higher additional value causes the average to rise. D. the higher additional value causes the average to fall.
If the market price of green tea is $20.00 per pound and the government will not allow green tea growers to charge more than $25.00 per pound of green tea, which of the following will happen?
A. Demand must eventually decrease so that the market will come into equilibrium at a price of $17.50. B. Supply must eventually increase so that the market will come into equilibrium at a price of $17.50. C. There will be a shortage of green tea. D. The price ceiling will be ineffective and the market will remain in equilibrium.