The invisible band principle indicates that competitive markets can help promote the efficient use of resources
What will be an ideal response?
even when each market participant cares only about their own self-interest rather than about the overall efficiency of resource use
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The company that manufactures Screaming Chocolate Zonkers breakfast cereal finds that its sales collapse, it is forced into bankruptcy, and it defaults on its bonds, as a result of information on the filthy conditions in its factory, which had long
been known to management, leaking out to the general public. This incident is best thought of as an example of A) symmetric information in the financial markets. B) asymmetric information in the financial markets. C) moral hazard in the financial markets. D) the generally poor state of sanitation in the food-processing industry in the United States.
Price ceilings lead to market surpluses
a. True b. False Indicate whether the statement is true or false
Use the below axes to draw a supply and demand diagram that illustrates the long-run situation in agriculture. Explain the problem
A tax on a good whose production causes pollution will
A. raise the equilibrium price and raise the equilibrium quantity. B. lower the equilibrium price and lower the equilibrium quantity. C. raise the equilibrium price and lower the equilibrium quantity. D. lower the equilibrium price and raise the equilibrium quantity.