What is the economic reasoning behind the proposal to legalize drugs?
a. Legal drugs will greatly increase the supply, which will reduce the price Americans pay to foreign producers of the drugs.
b. All forms of government restrictions on behavior are immoral, and ought to be removed.
c. Legal drugs will be much cheaper than illegal drugs, which will reduce incentive for crime to obtain money for drugs and to protect drug "businesses."
d. Legal drugs will be more expensive than illegal drugs, and the market system will encourage more production, thus lowering the price.
e. Dealing with supply is always easier than dealing with demand, and legalization accomplishes that.
c
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The gap between real GDP per person in the United States and South America has been narrowing since 1980
Indicate whether the statement is true or false
A price ceiling in a perfectly competitive market
a. creates more harm for sellers than gain for buyers b. creates more harm for buyers than gain for sellers c. is effective only it if is set above the equilibrium price d. can turn an inefficient outcome into an efficient outcome e. is a Pareto improvement
The special privileges and obligations of corporations are defined by law
a. True b. False Indicate whether the statement is true or false
Tax cuts would have the same directional effect on the dynamic aggregate demand curve as:
A. decreases in government purchases. B. temporary tax increases. C. the Federal Reserve selling U.S. treasury securities. D. the Federal Reserve buying U.S. treasury securities.