The market produces too little of a good with ______.

Which of the following are NOT included among Gordon's criticisms of Friedman's fooling model?

A) Workers buy many goods on a weekly basis and thus could discover quite quickly that prices had risen. B) Workers could discover movements in the aggregate price level fairly easily. C) The model relied on a non-market-clearing explanation of the labor market. D) Workers would predict higher prices if policies that led to higher prices in the past were used again.

What is not one of the reasons why farmers prefer price supports more than direct income supplements?

a. Direct income supplements tend to remain fixed over time. b. Direct income supplements tend to provide lower benefits. c. Direct income supplements tend to go predominantly to poor farmers. d. Direct income supplements tend to be viewed as demeaning.