Briefly explain the similarities and differences of decision making by the market sector and the public sector
What will be an ideal response?
The similarities of the two sectors include the presence of opportunity costs, competition by serving individual interests, and an incentive structure. The main differences between decisions by the two sectors are that the public sector often makes decisions on goods at zero price, by use of force, and by a majority voting system instead of "dollar votes."
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The marginal revenue product of an hour of labor used in steel production is equal to
A. its marginal physical product times the hourly wage rate. B. its marginal physical product times the price of steel. C. the hourly wage rate. D. its marginal physical product divided by the price of steel.
Suppose an increase in government spending stimulates real GDP without affecting the price level. What is the relevant range of the aggregate supply curve in this case?
A. the classical range B. the intermediate range C. the Keynesian range D. the monetarist range
The U.S. economy has had persistent inflation in recent decades. A possible explanation for the inflation is that
A. there have been decreases in aggregate demand while aggregate supply has remained unchanged. B. there have been increases in the growth rate while aggregate demand has remained unchanged. C. there have been decreases in the growth rate while aggregate demand has remained unchanged. D. growth in aggregate demand has been greater than growth in aggregate supply.
The Cournot model assumes that firm A maximizes its profit, holding firm B's output constant
What will be an ideal response?