Specialization allows for
A. more consumption for the trading partner with the comparative advantage.
B. equal consumption among trading partners.
C. more consumption for the trading partner with the absolute advantage.
D. more consumption for all trading partners.
Answer: D
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After firm A producing one good acquired another firm B producing another good, it lowered the prices for the bundle of goods. One can conclude that the goods were
a. substitutes b. complements c. not related d. None of the above
The market produces too few public goods because:
A.) The link between payment and consumption is broken. B.) They must be paid for by wealthy individuals. C.) Only the government can produce public goods. D.) The market distributes goods to those with the most money.
Relative to before the price ceiling, how much surplus do producers lose because of the ceiling?
The following questions refer to the accompanying diagram which shows the effects of a price ceiling. The initial price and quantity are P0 and Q0, respectively, and the price ceiling is imposed at the price P1. Assume that none of the potential deadweight loss can be avoided.
a. Area D + E + H
b. Area D + E
c. Area D + E + F
d. Area H.
According to economists, if policymakers are serious about reducing fuel consumption, they need to implement policies that make drivers think carefully about the costs and benefits of every mile driven, and the best way to accomplish this is by
A) increasing the gasoline tax. B) raising mandatory fuel economy standards. C) converting all roads to toll roads. D) limiting the number of miles per year that each driver is allowed to drive.