Black markets can occur when price ceilings are imposed in a market. Which of the following explains why sellers participate in a black market?
A) Sellers are able to sell the product for a higher than legal price.
B) There are more buyers in the black market than in the legal market.
C) The demand is perfectly elastic in a black market.
D) The demand is perfectly inelastic in a black market.
E) The surplus in the legal market means that many sellers can sell their product in the black market.
A
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What would be the Nash equilibrium of this game?
a. Bargain hard, bargain hard b. Firm bargains hard, union accommodates c. Union bargains hard, firm accommodates d. Both B&C
Figure 34-7
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In Figure 34-7, where AB represents the production possibilities of Pestoland and CD the production possibilities of Pastaland, Pastaland is
A. better at producing pasta and pesto than Pestoland. B. better at producing pasta, but relatively inefficient in producing pesto. C. relatively better at producing pasta than pesto. D. relatively better at producing pesto than pasta.
Evidence of differences in the average wages of black workers compared to white workers
a. does not alone provide conclusive evidence of discrimination. b. clearly indicates differences in productivity between races. c. is seldom used to provide evidence of discriminatory bias. d. clearly indicates discrimination on the basis of race.
A government airline safety regulation reduces the probability of a fatal airline crash by 0.005. If the costs associated with each airplane crash are equal to $600 million and the costs of performing more frequent safety inspections equal $4 million, the regulation is:
A. cost-effective because the marginal cost is $3 million and the marginal benefit is $4 million. B. cost-effective because the marginal cost is $4 million and the marginal benefit is $600 million. C. not cost-effective because the marginal cost is $4 million and the marginal benefit is $3 million. D. not cost-effective because the marginal cost is $4 million and the marginal benefit is $1 million.