"Economics is the study of how people eliminate scarcity." Do you agree or disagree? Why?
What will be an ideal response?
Disagree. Economics is the study of how people make choices because of scarcity. Scarcity cannot be eliminated because people do not ever have enough of everything to satisfy their every desire. Scarcity is a fact of life for both rich and poor.
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Mark Frost grows apples in a perfectly competitive market. If we drew a line in a graph that illustrates Mark's total revenue from selling apples, it would be
A) a straight, upward-sloping line. B) a straight, downward-sloping line. C) a horizontal line. D) a curve that is negatively sloped at low levels of output and positively sloped at higher levels of output.
A recession is defined as a period when the
a. real GDP increases less than 3 percent. b. real GDP falls by at least 5 percent in a single quarter. c. nominal GDP declines for two consecutive quarters. d. real GDP falls for two consecutive quarters.
A barter economy is different from a money economy in that a barter economy
A. encourages specialization and division of labor B. involves higher costs for each transaction C. eliminates the need for a double coincidence of wants D. has only a few assets that serve as a medium of exchange E. promotes market exchanges
If the Canadian government raises it budget deficit, then Canada's net capital outflows will
a. increase, so its exchange rate will rise. b. increase, so its exchange rate will fall. c. decrease, so its exchange rate will rise. d. decrease, so its exchange rate will fall.