Which statement best describes a capitalist economy?
A. Government policies determine the production and the allocation of goods and services.
B. The role of individual self-interest is relatively unimportant because government makes most economic decisions.
C. Government policies determine the production, but not the allocation, of goods and services.
D. Society determines production and the allocation of goods and services only through markets.
Answer: D
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
If the price elasticity of demand for a good is 0.3, then a 20 percent decrease in price results in a
a. 0.015 percent increase in the quantity demanded. b. 0.6 percent increase in the quantity demanded. c. 6 percent increase in the quantity demanded. d. 66 percent increase in the quantity demanded.
Economic goods are defined as
A. services only. B. tangible items only. C. anything from which an individual derives satisfaction. D. any item which is available in sufficient quantity at zero price.
Martha and Wendy start a cookie shop and the business is organized as a corporation. Because of poor planning the business goes bankrupt and the corporation's debt is $30,000. Martha has $30,000 in savings and Wendy has $80,000 in savings
Martha must pay ________ of the debt and Wendy must pay ________ of the debt. A) $0; $0 B) $15,000; $15,000 C) $0; $30,000 D) None of the above answers is correct because each must pay but the amount each must pay cannot be determined without more information about who managed the company.