Which of the following statements about resource allocation is correct?
a. Within a firm, resources are allocated by prices; in the market, resources are allocated by the decisions of managers.
b. Resources are allocated by prices both in the market and within the firm.
c. Within a firm, resources are allocated by the decisions of managers; in the market, resources are allocated by prices.
d. Resources are allocated by the decisions of managers both within the firm and in the market.
e. In the market, resources are allocated either by prices or by the decisions of managers.
C
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From which of the following goods is it most difficult to exclude free riders?
A) Tickets for the Newport Jazz Festival B) Food and beer sold at the Newport Jazz Festival C) Programs and souvenirs sold at the Newport Jazz Festival D) A radio simulcast of the Newport Jazz Festival
What would happen in the market for prescription drugs if people begin to view over-the-counter remedies as a good substitute for prescription medications?
A) Prescription medications will become an inferior good. B) There is an upward movement along the demand curve for prescription medications. C) There is a downward movement along the demand curve for prescription medications. D) The demand for prescription medications will decrease.
Automatic stabilizers are fiscal policy measures that
A) must be determined by the Congress in each budget. B) do not require new legislation. C) are determined by the Federal Reserve System. D) are part of discretionary fiscal policy.
Which statement is false?
A. Rent is an excellent means of efficiently allocating the use of scarce land. B. There is a very strong current in economic thought that denies the landlord's claim to rent. C. "The land shall not be sold forever" is a biblical admonition with which some people still agree. D. None of the statements is false.