In the above figure, CBL is the cost of breaking the law. If the good in the figure is made illegal and penalties are imposed on both buyers and sellers, then its price per unit
A) will be higher than if it was not illegal.
B) will be lower than if it was not illegal.
C) will be the same as when it was not illegal.
D) cannot be compared with its price when it was legal.
B
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Which of the following statements regarding the basic economic problem of scarcity is correct?
a. The problem only exists in countries that are not highly industrialized. b. The problem is likely to disappear as production increases. c. The problem is sure to disappear as technology improves. d. The problem will exist as long as resources are available in limited amounts. e. The problem will disappear as a person's income falls.
According to the law of demand, if the price of a good increases, other things being equal, the quantity demanded will decrease
a. True b. False Indicate whether the statement is true or false
A price floor is binding when it is set
a. above the equilibrium price, causing a shortage. b. above the equilibrium price, causing a surplus. c. below the equilibrium price, causing a shortage. d. below the equilibrium price, causing a surplus.
A firm that operates in a perfectly competitive market
a. controls its own price, but accepts its output level as given b. controls both its own price and its own output level c. controls its own output level, but accepts its price as given d. accepts both its output level and its price as given e. controls its own price, its own output level, and its own costs