When Feeding America changed its food allocation system to one that resembled a market, each food program was given a number of "shares" that they could use in bidding against other food programs for the types of food that best met the needs of the
people using their programs. This is an example of how the market leads firms to provide consumers with the goods they want, which Adam Smith described by using the metaphor
A) the invisible hand.
B) ceteris paribus.
C) don't look a gift horse in the mouth.
D) don't bite the hand that feeds you.
Answer: A
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Discuss the effects of an unexpected decrease in the inflation rate policy on unemployment in the short run. If the reduction in inflation is permanent, what happens in the long run?
What will be an ideal response?
Refer to Figure 4-1. If the market price is $1.00, what is the consumer surplus on the third burrito?
A) $0.50 B) $1.00 C) $1.50 D) $7.50
During the 2007-2009 financial crisis the excess reserve ratio
A) increased sharply. B) decreased sharply. C) increased slightly. D) decreased slightly.
Which of the following is false? a. Market prices signal the relative availability of products to buyers
b. Market prices signal the relative value consumers place on products to sellers. c. The information and incentives offered by market price adjustments provide the "invisible hand" toward socially desirable cooperation between consumers and producers. d. None of the above are false; all are true.