For national security reasons a government decides that all of its base metal industry should not be located in the same geographical region, as it presently is
The government decides to allocate production quotas to firms in different parts of the country, but does not restrict in any way the transactions between consumers and base metal producers. This scheme is A) efficient as consumers still buy from whoever they like.
B) efficient as those consumers who value base metals the most can purchase them.
C) likely to be inefficient as some of the industry's output is not produced by the firms with the lowest cost.
D) likely to be inefficient as the scheme will require subsidies to work.
E) efficient as learning by doing effects will be strongest in the firms set up in new geographical regions.
C
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
The labor supply curve:
A. has a negative slope. B. shows the relationship between the total quantity of labor supplied by all firms in the economy and the wage rate. C. shows that, all things being equal, more workers will want to work when wages are higher and less will want to work when wages are lower. D. All of these are true.