The government imposes a price ceiling on sugar that is above the market price. You are asked to suggest a rationing scheme that will minimize the misallocation of resources. You suggest
A. using rationing coupons that can be resold.
B. using rationing on a first-come, first-served basis.
C. using rationing coupons that cannot be resold.
D. that no rationing system will be necessary.
Answer: D
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What is the shape of the marginal revenue curve derived from a linear downward sloping demand curve?
A) Horizontal B) Vertical C) U-shaped D) Downward sloping, with a constant slope
Long-run equilibrium under monopolistic competition requires that
a. the demand curve intersect the average cost curve. b. the demand curve be tangent to the average cost curve. c. price be equal to marginal cost. d. quantity produced be at the point where average cost is at a minimum.
The production possibilities frontier shows the trade-offs that the producer faces but does not identify the choice the producer will make
a. True b. False Indicate whether the statement is true or false
Most economists believe unions are bad for the economy as a whole
a. True b. False Indicate whether the statement is true or false