One of the strengths of a socialist economy, according to those who advocate such a system, is that government intervention will enable a more equitable distribution of income
a. True
b. False
Indicate whether the statement is true or false
True
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Ham and eggs are complements. If the price of ham rises, the demand for eggs will
A) increase or decrease but the demand curve for ham will not change. B) decrease and the demand curve for ham will shift rightward. C) not change but there will be a movement along the demand curve for eggs. D) decrease and the demand curve for eggs will shift leftward.
Experience with patents in the pharmaceutical industry shows that when patents on drugs expire
A) prices remain high without patent protection because of a lack of competition. Firms that are not granted patents cannot compete with firms that are granted patents. B) other firms are free to produce chemically identical drugs. Competition reduces the profits that had been earned by the firms that received patents. C) most patients will continue to buy the drugs from the same firms because their doctors recommend they buy brand-name drugs. D) firms will find ways to obtain additional patent protection—often by making cosmetic changes in drugs that were patented—so that they can continue charging high prices.
If the price of inputs falls and the budget deficit rises due to an increase in government spending, then the:
a. Price index rises, and real GDP rises. b. Price index rises, and real GDP falls. c. Price index rises, and the change in real GDP is uncertain. d. Price index falls, and real GDP rises. e. Price index is uncertain, and real GDP rises.
Price discrimination
a. is illegal in the United States and Europe. b. can occur in both perfectly competitive and monopoly markets. c. is illogical because it does not maximize profits. d. can maximize profits if the seller can prevent the resale of goods between customers.