(Consider This) Which of the following best explains why the solar panel companies Solyndra and Abound went bankrupt in 2011 and 2012, respectively?
A. Overreliance on government subsidies that made them inefficient.
B. Oversupply of solar panels on the world market that drove down prices and made these
firms uncompetitive in the market.
C. Expansion of other alternative energy sources made solar power unprofitable.
D. Dramatic and unexpected increases in input costs caused huge economic losses.
Answer: B
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Why does the substitution bias cause the consumer price index to overstate inflation and the cost of living? Why does the increase in quality bias cause the consumer price index to overstate inflation and the cost of living?
What will be an ideal response?
Nations specialize in production and engage in international trade in order to:
A. Protect domestic consumers and producers B. Increase output and income C. Improve transportation D. Increase employment