The saying “the lower the price, the better” may not always be correct for an economy’s public interest because
A. people should have to pay for what they want.
B. people will overuse something they perceive as being cheaper than the utility they receive for it.
C. the government can no longer afford to provide all the goods and services it provides because it is slowly going broke.
D. cheaper prices will make people buy less of other things.
Answer: B
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According to the law of one price, if the price of Colombian coffee is 100 Colombian pesos per pound and the price of Brazilian coffee is 4 Brazilian reals per pound, then the exchange rate between the Colombian peso and the Brazilian real is
A) 40 pesos per real. B) 100 pesos per real. C) 25 pesos per real. D) 0.4 pesos per real.
If the firm threatens a lockout (and the threat is credible), what is the union's best response?
a. Bargain hard b. Accommodate c. Run d. Hide
When oligopolists take into account their competitors' behavior, this situation is called:
a. mutual interdependence. b. monopolistic competition. c. independent. d. price discrimination. e. loss minimization.
In economics, the cost of something is
a. the dollar amount of obtaining it. b. always measured in units of time given up to get it. c. what you give up to get it. d. often impossible to quantify, even in principle.