In order for a central planner to achieve the invisible-hand type efficiency of a free market, the planner would
a. need masses of statistics.
b. be required to makes enormous calculations.
c. need to be able to measure a consumer's marginal utility in order to equate MU with MC.
d. All of the above would be required.
d
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In early 2007, Pioneer and JVC, two Japanese electronics firms, each announced that their profits were going to be lower than expected because they both had to cut prices for LCD and plasma television sets
Which of the following could explain why these firms did not simply raise their prices and increase their profits? A) The firms are still making profits, just not as high as expected so there is room to lower prices until one can force the other out of business. B) The move to cut prices is probably just a temporary one to gain market share. In the long run the firms will raise prices and be able to increase their profits. C) Most likely, intense competition between these two major producers probably pushed prices down. Thereafter, each feared that it would lose its customers to the other if it raised its prices. D) In perfect competition, prices are determined by the market and firms will keep lowering prices until there are no profits to be earned.
In the coordination failure model, a rightward shift in the labor supply curve
A) increases the real wage and increases employment. B) increases the real wage and decreases employment. C) decreases the real wage and increases employment. D) decreases the real wage and decreases employment.
All railroads were private enterprises with no government influence
Indicate whether the statement is true or false
The ratio of a change in consumption to a change in disposable income is the:
a. consumption function. b. propensity to consume. c. average propensity to consume. d. extra propensity to consume. e. marginal propensity to consume.