The signals in markets are determined
A) by supply and demand.
B) for all goods by the government through the use of price controls.
C) in an unfair manner that ends up hurting the poor.
D) by nonprice rationing devices.
A
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Samantha is at a friend's house for dinner. Her friend says "I can re-heat either the lasagna or the fried rice." Samantha likes them both, but chooses the fried rice. Does Samantha's choice entail a cost?
A) No—as long as her friend didn't charge Samantha for the meal. B) Yes—Samantha sacrificed the opportunity to eat lasagna. C) Yes—as long as Samantha reimburses her friend for the cost of re-heating the meal. D) Both A and C above.
Social welfare is maximized in a perfectly competitive market
Indicate whether the statement is true or false
Assume you pay a premium of $0.70/bu for a call option with a strike price of $6.00/bu and that the current futures price is $6.50/bu. Then, the option is:
A. In-the-money B. At-the-money C. Out-of-the-money D. Worthless
Trade that is within a country or between countries is based on the principle of
A) absolute advantage. B) scarcity. C) competition. D) comparative advantage.