Why must every nation answer the three fundamental economic questions?
A. because of differences in the distribution of resources
B. because some nations have better production technology
C. because some nations are wealthy and others are poor
D. because of the problem of scarcity
Answer: D
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Which of the following is a defining characteristic of all perfectly competitive markets?
A. Consumers display strong brand loyalty. B. All firms sell the same standardized product. C. Each firm in the market faces a perfectly inelastic demand curve. D. The market demand curve is perfectly elastic.
Which of the following statements is true?
A) A nation's institution comprises of the rules and regulations in the nation, while a nation's culture comprises of the saving habits of its citizens. B) A nation's culture comprises of both the saving habits of its citizens and the rules and regulations in the nation. C) A nation's culture comprises of both the ongoing tax rate and the rules and regulations in the nation. D) A nation's culture comprises of the ongoing tax, while a nation's institutions comprises of the rules and regulations in the nation.
Refer to the payoff matrix below, which ________ a prisoner's dilemma. If both countries cooperate, Home will choose Policy ________ and Foreign will choose Policy ________
A) is; 1; A B) is; 2; B C) is; 1; B D) is not; 2; B E) is not; 1; A
Because of the adverse selection problem
A) good credit risks are more likely to seek loans causing lenders to make a disproportionate amount of loans to good credit risks. B) lenders may refuse loans to individuals with high net worth, because of their greater proclivity to "skip town." C) lenders are reluctant to make loans that are not secured by collateral. D) lenders will write debt contracts that restrict certain activities of borrowers.