Government regulation is
a. subject to the same problems of lack of information and lack of incentives for economic efficiency as centrally planned economies.
b. the only reliable way to improve environmental quality.
c. not subject to political concerns when it comes to environmental quality.
d. the most economically efficient way to reduce greenhouse gases.
A
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In the graph for the consumption function, the 45-degree line
A) contains only a consumption component.
B) represents both planned consumption and planned investment.
C) shows various combinations where planned consumption equals real disposable income.
D) reflects a decreasing APC as real disposable income rises.
A rent ceiling on housing creates a problem of allocating the available housing units because
A) the demand for housing decreases and the demand curve shifts leftward. B) the supply of housing increases and the supply curve shifts rightward. C) a shortage of apartments occurs. D) a surplus of apartments occurs. E) it eliminates search, which is one of the major ways housing units are allocated.
The Seattle Mariners baseball team has a monopoly on major league baseball in the Northwest. If the Mariners could be purchased by anyone with enough money, we could argue that this purchase is fair according to the
A) fair rules test. B) fair results test. C) fair price test. D) fair output test. E) allocative fairness test.
Suppose paper pulp mills are permitted to emit harmful pollutants, free of charge, into the air. How will the price and output of paper in a competitive market compare with their values under conditions of ideal economic efficiency?
a. The price will be too high, and the output will be too large. b. The price will be too low, and the output will be too large. c. The price will be too low, and the output will be too small. d. The price will be too high, and the output will be too small.