Suppose the market for "soda X" is in equilibrium. If the FDA announced today that this soda has been proven to cause a fatal disease, what would be most likely to happen to the equilibrium price and equilibrium quantity of soda X?
a. Price increases and quantity increases
b. Price decreases and quantity increases
c. Price increases and quantity increases
d. Price decreases and quantity decreases
e. No change in price and quantity
d
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"Allocative efficiency requires that the maximum number of people have access to all of the goods and services that our economy produces." Is this statement true or false? Explain your answer
What will be an ideal response?
The claim that lower environmental standards in foreign countries reduce industrial competitiveness for high standard countries is on firm theoretical ground because
A) higher environmental standards requirements raise the cost of production to a firm or industry abiding by the rules. B) there will be a race-to-the-bottom competition on environmental standards. C) the interests of firms that are subject to the high standards coincide with the nation's interests, one-for-one. D) environmental standards in most countries have gotten more lax over time.