Suppose one knows two facts: first, the market for prescription drugs experiences chronic shortages and second, the government sets the price for prescription drugs. One can conclude that the government has:
A. set the price below the equilibrium price.
B. set the price too high.
C. set the price above the equilibrium price.
D. encouraged buyers to hoard prescription drugs.
Answer: A
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Moral hazard occurs because people act
A) in the interest of others at all time. B) in the best interest of society. C) in their own self-interest. D) like anarchists.
When Jim adds $1,000 worth of farm equipment to his production process, he finds that his corn output increases from 200 to 350 bushels. If the price of corn is $2 per bushel, the marginal revenue product of capital is
a. $10 b. $150 c. $300 d. $350 e. $1,000
Why study the economics of agriculture in the United States? Give five reasons
What will be an ideal response?
Refer to the given data. Assume now that the prices of a and b are $15 and $20 respectively. To maximize profits, what combination of a and b should the employer hire?
Answer the question on the basis of the following marginal product data for resources a and b. The output of these independent resources sells in a purely competitive market at $1 per unit.
A. 3 of a and 5 of b.
B. 5 of a and 7 of b.
C. 7 of a and 7 of b.
D. 6 of a and 2 of b.