How do the three basic economic questions relate to the firm?
What will be an ideal response?
Firms must choose WHAT goods and services to produce, HOW to produce them (through appropriate choice of resources and technology), and FOR WHOM they will be provided (what segment of the market on which to focus).
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Members of the Federal Reserve Board of Governors
A) are confirmed by the House of Representatives. B) frequently need to deal with political pressures. C) are members of the Federal Open Market Committee. D) are appointed to 4 year terms.
Suppose the measured unemployment rate is 7.4% and the natural rate of unemployment is 5.1%. In this situation, policymakers should
A) attempt to stimulate the economy. B) attempt to slow the economy. C) not intervene in the economy. D) The actions of policymakers will depend on how much of the natural rate is frictional unemployment and how much is structural unemployment.
Inflation expectations in the United States generally
A) fell from 1971 to 1976, rose from 1977 to 1985, then fell from 1985 to 1995, and have been stable since then. B) fell from 1971 to 1985, then rose from 1985 to 2000, and have been stable since then. C) rose from 1971 to 1987, then fell from 1987 to 2006. D) rose from 1971 to 1982, then fell from 1982 to 2000, and have been stable since then.
What are the two possible causes of market failure?