What is a black market, and under what economic condition is it most likely to thrive?
What will be an ideal response?
Explanation: Even the most command-oriented economies operate with substantial black markets, or underground economies, which are markets where the buyers and sellers make transactions without the government’s approval.
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Omega, Inc., accounts for 15 percent of total sales in its industry. It uses a highly technical process on a raw material that is difficult to acquire. The firm closely monitors pricing and output developments in its industry. What additional information is needed to classify this industry as part of an oligopoly?
a. the number of patents held by Omega’s competitors b. the number of competitors and their market shares c. the level of government restriction on the industry d. the start-up costs for a new firm entering the industry
Suppose an oil cartel has an agreement to restrict members' production in order to maintain a price of $30 per barrel. A single cartel member may want to cheat and exceed its quota so that it can:
A. reduce its costs. B. charge higher prices. C. make demand more inelastic. D. earn a bigger profit.
If the real marginal tax rate increases in the market clearing model then:
a. the supply of labor decreases. b. real output, Y, declines. c. the demand for capital decreases. d. all of the above.
The capital account of the balance of payments consists of
A. the long-term transactions that we conduct with foreigners. B. all the goods and services produced during the current year, which we buy from or sell to foreigners. C. the interest, dividends, and profits that the U.S. collected from foreign investments less what U.S. firms paid foreign investors. D. None of these statements are true.