Which of the following statements is false?
A) Trade-offs do not apply when the consumers purchase a product for which there is excess supply, such as a stock clearance sale.
B) Anytime you have to decide which action to take you are facing an economic trade-off.
C) Economics is a social science that studies the trade-offs we are forced to make because of scarcity.
D) Every individual, no matter how rich or poor, is faced with making trade-offs.
A
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Use a long-run average cost curve graph to illustrate how diseconomies of scale would not make it beneficial for two companies to go through with a merger
What will be an ideal response?
Monetary policy has a ________ effect on aggregate demand in a(n) ________ economy, and fiscal policy has a ________ effect on aggregate demand in a(n) ________ economy
A) stronger; closed; weaker; open B) stronger; open; weaker; open C) weaker; open; weaker; open D) weaker; closed; weaker; closed
France is capital abundant and Italy is labor abundant. Shoes are labor intensive and wheat is capital intensive
Draw diagrams to illustrate the pre- and post-trade equilibria for each of the two countries including the production points, the consumption points, the international price, and the volumes of exports and imports for each. Be sure to identify which country has comparative advantage in which good. Which factors gain and which lose when trade is opened between the two countries? Explain carefully.
Which of the following is not a determinant of supply?
a. input prices b. technology c. tastes d. expectations