The United States decides what goods to produce by letting
a. only the government decide
b. members of Congress decide
c. only the producers decide
d. the producers and consumers decide
Answer: d. the producers and consumers decide
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According to the economic way of thinking, government officials tend to vote on legislation that
A) concentrates benefits on a well-organized group. B) disperses costs throughout a great number of politically unorganized people. C) generates short-term benefits and postpones the costs. D) does all of the above. E) does none of the above.
Use the above figure. If a commission regulates the above monopoly using fair-return (average cost pricing), then the industry's output will be ________ and the product's price will be ________
A) Q1; P1 B) Q2; P3 C) Q3; P2 D) Q4; P1
When a cartel breaks down and its members start cheating, the behavior in the industry becomes a
A) noncooperative game. B) zero-sum game. C) high stakes game. D) positive sum game.
A subsidy to buyers has been placed in the market in the graph shown. Why might the government enact such a policy?
A. As a way to encourage consumers to substitute away from the good B. As a way to discourage the production of the good C. As a way to encourage the consumption of the good D. As a way to discourage the consumption of the good