________ increases economic efficiency because it forces firms to produce and sell goods and services as long as the additional benefit to consumers is greater than the additional cost of production
A) Competition
B) A centrally planned economy
C) Equity
D) Voluntary exchange
A
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In the Keynesian model, it is assumed that, when demand for a firm's product changes, the firm:
A. changes prices and production levels to meet demand. B. changes prices to meet the demand. C. changes production levels to meet the demand. D. changes prices, but holds production levels constant, to meet the demand.
When unions or legislation makes it necessary for a firm to pay higher wages,
A) efficiency declines. B) income is transferred from wealthy people to poor people. C) the marginal value of retained employees falls. D) the marginal value of retained employees rises. E) total purchasing power increases.
In a budget line/indifference curve figure, how do you identify the best affordable combination of any two goods?
What will be an ideal response?
According to the aggregate supply-aggregate demand model, an expansionary fiscal policy will, in the long run,
a. have the opposite effect of an expansionary monetary policy b. increase both real GDP and the price level c. increase real GDP and decrease the price level d. increase real GDP and leave the price level unchanged e. increase the price level and leave real GDP unchanged