Cross-subsidization implies that a loss from one product's sales will be made up by the profit from another product's sales
a. True
b. False
Indicate whether the statement is true or false
True
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Suppose the firms in the chemical industry are allowed, free of charge, to dump harmful products into rivers. How will the price and output of the chemical products in a competitive market compare with their values under conditions of ideal economic efficiency?
a. The price would be too low, and the output would be too large. b. The price would be too high, and the output would be too large. c. The price would be too low, and the output would be too small. d. The price would be too high, and the output would be too small.
Suppose there are only two people in the world. Each person's production possibilities frontier also represents his or her consumption possibilities when
a. neither person faces trade-offs. b. the frontiers are straight lines. c. the frontiers are bowed out. d. they choose not to trade with one another.