The government regulates monopolies in order to
A. Protect consumers from false advertising.
B. Prohibit mergers or acquisitions that would lessen competition.
C. Ensure that product quality meets minimum standards, such as testing of new drugs.
D. All of the choices are correct.
Answer: D
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An appreciation of the U.S. dollar occurs when
A) the international price of the dollar falls. B) the international price of the dollar rises. C) the supply of dollars in international markets increases. D) the U.S. demand for foreign currencies increases.
Which of the following is NOT a common characteristic of a developing country?
A) extensive direct government control of the economy B) history of low inflation C) many weak credit institutions D) "pegged" exchange rates E) Agricultural commodities make up a large share of its exports.
If the government wants to encourage the consumption of a particular good, they should enact:
A. a subsidy to buyers, since they want to affect consumption of the good. B. a subsidy to sellers, since they want more to be produced and offered for sale. C. a subsidy to buyers, since they deserve the benefit more than the producers. D. a subsidy on either buyers or sellers, since they will both have the same effect on the market.
If political officials want to minimize the excess burden accompanying a tax, they should set the tax at a rate
a. that will maximize the revenue derived from the tax. b. slightly above the rate that will maximize the revenue derived from the tax. c. well below the rate that will maximize the revenue derived from the tax. d. that is the highest that could possibly be imposed.