How does a laissez-faire economy decide which consumer gets each of the goods that has been produced?
What will be an ideal response?
The price mechanism solves the distribution problem by assigning the highest prices to the goods in greatest demand and then letting individual consumers pursue their own self-interests. Price acts as a rationing device that apportions the available goods among consumers who are willing to pay the most for them.
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On May 12, 2011, the U.S. dollar was worth 0.70 euros. How many dollars did it take to buy 1 euro?
A. 0.70 B. 1.43 C. 1.70 D. 2.70
The logic of the budget constraint dictates that an individual's choice must be a point above the actual budget constraint
a. True b. False Indicate whether the statement is true or false
Refer to the graph below.
Which of the shifts explains what would happen to the production possibility curve if restrictions were imposed on tuna fishing?
A. I B. II C. III D. IV
Use the following table to answer the next question. The following national income data for an economy is in billions of dollars.Consumption$5,100Investment1,100Transfer payments1,050Government purchases1,400Exports850Imports950Net foreign factor income20GDP for this economy is ________.
A. $7,500 billion B. $6,400 billion C. $9,400 billion D. $10,470 billion