Suppose that Kansas farmers can grow wheat more cheaply than can Texas farmers. In the interest of efficiency, what is the desirable outcome?
A. Pass a law in Kansas mandating a minimum price for wheat equal to what is charged by Texas farmers.
B. Allow the Kansas farmers to sell their wheat for a lower price.
C. Pass a law in Texas mandating a maximum price for wheat equal to what is charged by Kansas farmers.
D. Have Texas residents boycott Kansas wheat.
Answer: B
You might also like to view...
Answer the following statement(s) true (T) or false (F)
1. We know that the producer's surplus accruing to a simple monopoly firm must be greater than operating in a competitive market, else firms would not act as monopolists. 2. In both the short-run and the long-run, a monopoly is guaranteed to earn positive profits. 3. An excise tax will increase the deadweight loss due to monopoly, but an excise subsidy can reduce the deadweight loss. 4. An unregulated, profit maximizing monopoly will never set a price where demand is inelastic. 5. The large increase in the price of oil and in the total revenues and profits of the US oil industry in the 1990's are evidence that it was exercising monopoly power.
Cooperation in an economy characterized by extensive specialization requires
A) a rapid exchange of accurate information. B) flexible government controls. C) high unemployment to stem inflation. D) highly trained economists to "fine-tune" the economy. E) price controls.
Free markets coordinate economic activity in such a way as to eliminate the possibility of inflation or unemployment.
Answer the following statement true (T) or false (F)
What was the primary motivation behind the creation of the 1988 base Accord?
What will be an ideal response?