Which of the following guides sensible decisions regarding the management of business risk in a market system?
A. The profit and loss system
B. The "invisible hand"
C. Taxes and subsidies
D. Consumer sovereignty
Answer: A
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The presence of positive and negative externalities associated with many economic activities generates __________ in our economy
a. extra values b. market failure c. incompleteness d. illegality e. free and unfree riders
Budget surplus
What will be an ideal response?
For a firm to price discriminate,
a. it must be a natural monopoly. b. it must be regulated by the government. c. it must have some market power. d. consumers must tell the firm what they are willing to pay for the product.
If a country devotes its resources to acquiring more physical capital it will:
A. not have less overall GDP in the future. B. have more current consumption. C. not face the investment trade-off. D. have more GDP per capita in the future.