In a market economy, access to goods and services is increased by ______.
a. social programs
b. education
c. random selection
d. seniority
b. education
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A company finds that at its present level of production, MR = MC at $14, MC = AVC at $15, and MC = ATC at $20. Your advice to the firm regarding its short-run operations is
A) to continue production, as it is earning an economic profit of $1 per unit. B) to continue production, as it is earning an economic profit of $6 per unit. C) to shut down. D) to continue production at a loss.
If finding the last stamp to complete your collection makes you happier than finding the first, then:
a. marginal utility is zero. b. marginal utility is negative. c. total utility is decreasing. d. total utility is constant. e. marginal utility is not diminishing.
Throughout history many governments have financed government operations with the printing press, and paying government bills by increasing the money supply. The United States followed this path during the Civil War, approximately doubling the U.S. money
supply between 1860 and 1865 using paper fiat money called Greenbacks. What do you think this rapid increase in the money supply did to inflation and inflationary expectations? Suppose the economy was in long-run equilibrium by the end of the war and the government began to remove Greenbacks and reduce the money supply. Use your understanding of the Phillips curve relationship to explain the effect on the economy.
If the short-run aggregate supply increases by less than the long-run aggregate supply, then, at the short-run equilibrium
A) GDP will be below potential GDP. B) aggregate demand will increase. C) GDP will be equal to potential GDP. D) GDP will be above potential GDP.