The police powers of the government include
(a) price fixing.
(b) licensing.
(c) inspection.
(d) all of the above.
(d)
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What would happen in the market for prescription drugs if people begin to view over-the-counter remedies as a good substitute for prescription medications?
A) Prescription medications will become an inferior good. B) There is an upward movement along the demand curve for prescription medications. C) There is a downward movement along the demand curve for prescription medications. D) The demand for prescription medications will decrease.
Which of the following is not a characteristic of a perfectly competitive market?
a. There are many buyers and sellers. b. Firms can freely enter and exit the market. c. Many firms have market power. d. Firms sell very similar products.
Refer to the accompanying figure. Suppose the solid line shows the current demand for coffee. In response to news that next year's coffee harvest will be extremely good due to favorable weather conditions, you should expect:
A. the quantity of coffee demanded to decrease, but no shift in the demand curve. B. the demand curve to shift to D(B) in anticipation of lower future prices. C. the demand curve to shift to D(A) in anticipation of lower future prices. D. neither a change in quantity demanded nor a shift in demand because it will be a long time before next year's coffee crop is harvested.
Explain what economists mean when they say that the United States is a net debtor nation. Identify a potential problem and a positive aspect associated with this status.
What will be an ideal response?