The dynamic process of competition
a. provides profit-seeking sellers with little incentive to heed consumer preferences.
b. was shown by Adam Smith to be a major source of economic inefficiency.
c. provides consumers with alternative suppliers and thus a mechanism with which they can discipline sellers.
d. will permit business decision makers to earn long-run economic profit unless they are regulated by government officials.
C
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The systemic costs and burdens that inflation imposes upon a society are almost entirely the result of
A) government price controls. B) inability to predict its rate and timing. C) the fact that no one can ultimately gain from higher prices because everyone is a consumer. D) the lag between the rise of wage costs and the subsequent rise of prices. E) the lag between the rise of prices and the subsequent rise of wages.
When a tax is placed on the buyers of a product, a result is that buyers effectively pay
a. less than before the tax, and sellers effectively receive less than before the tax. b. less than before the tax, and sellers effectively receive more than before the tax. c. more than before the tax, and sellers effectively receive less than before the tax. d. more than before the tax, and sellers effectively receive more than before the tax.
Assume the firms in a monopolistically competitive industry initially are earning positive economic profits. Which of the following will not occur over? time?
A) The firms' economic profits will be reduced.
B) New firms will enter.
C) Demand for the existing firms' output will become more inelastic.
D) The number of substitutes available in the industry will increase.
Which of the following statements is not one of the factors leading to the Russian economy transitioning toward capitalism?
A. allowing private ownership of factors of production B. ability for individuals to earn profits C. allowing supply and demand to set higher prices for basic consumer goods D. restrictive regulations and licensing requirements for businesses