In Adam Smith's competitive market economy, the question of what goods to produce is determined by the:
a. "invisible hand" of the price system. b. "invisible hand" of government.
c. "invisible hand" of public interest. d. "visible hand" of laws and regulations.
a
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Industry profits are maximized in the figure below (QM1 = QM2):
A. at the point where r1 = r2. B. only at point QM1. C. only at point QM2. D. on the line segment joining points QM1 and QM2.
A risk-neutral monopoly must set output before it knows the market price. There is a 50 percent chance the firm's demand curve will be P = 20 ? Q and a 50 percent chance it will be P = 40 ? Q. The marginal cost of the firm is MC = Q. The expected profit-maximizing price is:
A. $20. B. $10. C. $15. D. $5.
According to the law of ________, there is a positive relationship between price and ________.
A. supply; the quantity supplied B. demand; quantity demanded C. demand; change in demand D. supply; the change in supply
In 1991, what group of countries began the process of forming the largest free-trade zone in the world?
A. the United States, Canada, and Mexico B. the North Atlantic Treaty Organization C. the European Community D. the Organization of Petroleum Exporting Countries