Fast food restaurants produce a range of menu items such as hamburgers, chicken sandwiches, salads, and french fries. What fundamental economic question are they addressing by offering this range of items?
A) How to produce goods that consumers want?
B) Why produce a variety of menu items?
C) What to produce?
D) Who to produce the menu items for?
Answer: C
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If the representative basket of European goods and services costs 40 euros, the representative U.S. basket costs $50, and the dollar/euro exchange rate is $0.90 per euro, then the price of the European basket in terms of U.S. basket is
A) [(0.9 $/euro) (40 euro per a European basket)]/[(50 $/U.S. basket)]. B) [(0.9 $/euro) (50 $/U.S. basket)]/[(40 euro per a European basket)]. C) [(40 euro per a European basket)]/[(50 $/U.S. basket) (0.9 $/euro)]. D) [(50 $/U.S. basket)]. E) [(0.9 $/euro) (40 euro per a European basket) (50 $ U.S. basket)].
A result of a positive externality in the production of a good is that
A) the price system will over-allocate resources to the production of that good or service. B) the price system will under-allocate resources to the production of that good or service. C) the market supply will be too high. D) the market demand will be too high.
The most frequently used experimental or observational data in econometrics are of the following type:
A) cross-sectional data. B) randomly generated data. C) time series data. D) panel data.
Which of the following would most likely decrease the current demand for DVD players?
a. an increase in consumer income b. an increase in the prices of television sets, a complement for DVD players c. an expectation that the price of DVD players would rise sharply in the near future d. an increase in the price of VCRs, a substitute for DVD players