Which of the following statements is correct?
A. Low prices may not always be in the public interest.
B. If prices on scarce resources are set “too low,” consumers will receive the “wrong” signals and be encouraged to consume more, thus squandering resources.
C. Raising prices on scarce resources is generally politically unpopular.
D. All of the responses are correct.
Answer: D
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Relative to free trade, domestic producers of a good are ________ off with a tariff because of the ________
A) better; higher price and greater quantity sold B) better; higher price and smaller quantity sold C) better; lower price and greater quantity sold D) worse; lower price and smaller quantity sold E) worse; higher price and greater quantity sold
In the long run, a firm in monopolistic competition will
A) make a negative economic profit, that is, an economic loss. B) make zero economic profit, that is, a normal profit. C) make a positive economic profit. D) None of the above answers is necessarily correct because the amount of the profit or loss depends on the slope of the demand curve.
There has been an unmistakable steady trend toward bigness in business since
A. the Civil War. B. 1911. C. the mid-1930s. D. the late-1990s.
To deal with dangerous behavior in the financial system, macro prudential tools can be used to aim directly at
A) borrowers. B) lenders. C) banks and other financial institutions. D) none of the above E) all of the above