The government imposes a price floor on wheat that is below the market price. You are asked to suggest a rationing scheme that will minimize the misallocation of resources. You suggest
A. using a queuing system to compensate for the excess demand.
B. using rationing coupons that can be resold.
C. that no rationing system will be necessary.
D. using rationing coupons that cannot be resold.
Answer: C
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In the long-run equilibrium in a perfectly competitive market,
A) the firms make an economic profit. B) the firms' owners make a normal profit. C) the average total cost is maximized. D) marginal cost is at a minimum.
In 1860 government revenues exceeded the earnings of cotton exports by fourfold
Indicate whether the statement is true or false
One assumption of the model of perfect competition is that entry into the market is easy. This implies that:
a. there are government licensing requirements for a firm to enter the market. b. there are no significant economies of scale relative to the size of the market. c. one firm has gained a patent in the industry. d. significant economies of scale do exist in the industry. e. there is no government intervention.
The Clayton Antitrust Act
a. was opposed by labor unions. b. defended monopolies. c. outlawed price discrimination. d. never went into effect.