The market's way of rationing limited resources, goods, and services to consumers in a market economy is through
A. commissions.
B. profits.
C. incentives.
D. prices.
D. prices.
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Hardware stores charge higher prices for snow shovels after a big snowstorm. What role do prices play in the snow shovel market?
What will be an ideal response?
According to the circular flow diagram, the dollar value of a nation's output is equal to
A) profits. B) total income. C) net income minus taxes. D) wages.
When a consumer is consuming at a point where his or her budget line is not as steep as his or her indifference curve, then he or she should
A) consume more of the good that is measured on the horizontal axis. B) consume less of the good that is measured on the horizontal axis. C) not change his or her behavior. D) consume none of the good that is measured on the horizontal axis.
Everything else held constant, when financial frictions increase, the real cost of borrowing ________ so that planned investment spending ________ at any given inflation rate
A) increases; falls B) decreases; falls C) decreases; rises D) increases; rises