A price ceiling in a perfectly competitive market
a. leads to the same result as if the market were monopolized
b. results in a welfare loss
c. is effective only if it is set above the equilibrium price
d. may result from collusion among the firms selling in that market
e. may result from collusion among the consumers buying in that market
B
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In order for the condition E$/HK$ = PUS/PHK to hold, what assumptions does the principle of purchasing power parity make?
A) Only that there are no transportation costs and restrictions on trade. B) Only that the markets are perfectly competitive, i.e., P = MC. C) The factors of production are identical between countries. D) No arbitrage exists. E) HK and the US are perfectly competitive and there are no transportation costs or restrictions on trade.
The International Monetary Fund is an organization that operates under the supervision of the Treasury of the U.S. Government
Indicate whether the statement is true or false