The problem of determining what goods and services society should produce exists because:
A) resources are plentiful.
B) resources are scarce.
C) most of our resources are privately rather than socially owned.
D) most of our resources are socially rather than privately owned.
Ans: B) resources are scarce.
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The Law of Diminishing Marginal Benefit states that:
A) the demand for a commodity declines as its price increases. B) the demand for a commodity is more dependent on income than on price. C) the willingness to pay for an additional unit declines as more of a good is consumed. D) lower levels of consumption give lower level of utility.
Government tax revenues ________ during an expansion and ________ during a recession, which leads to larger budget deficits during the ________ phase of the business cycle
A) decrease; increase; expansion B) decrease; decrease; expansion C) increase; decrease; expansion D) increase; decrease; recession E) increase; increase; recession
Refer to Table 2-12. Guatemala has a comparative advantage in the production of
A) sailboats. B) canoes. C) both products. D) neither product.
An increase in the general price level is termed:
a. the Consumer Price Index. b. inflation. c. deflation. d. stagflation. e. nominal pricing.