Answer the following statements true (T) or false (F)
1. The choice of the most efficient production technique is not affected by how much buyers want to buy the product.
2. In a market system, a consumer's willingness to pay—but not his ability to pay—is based on his income.
3. Even if prices are fixed and competition is restricted by the government, the "invisible hand" will still work in the economy and lead to economic efficiency.
4. In a competitive market economy, firms and resource suppliers seeking to further their own self-interest will end up, as though guided by an "invisible hand," promoting the public interest.
1. TRUE
2. FALSE
3. FALSE
4. TRUE
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A man can rewire a house in 12 hours and can panel a room in 15 hours, and his teenage son can rewire a house in 18 hours and can panel a room in 16 hours. Who is more efficient in rewiring a house, and who is more efficient in paneling a room?
a. The father is more efficient at both activities. b. The father is more efficient at rewiring a house, and the son is more efficient at paneling a room. c. The father is more efficient at paneling a room, and the son is more efficient at rewiring a house. d. The two are equally efficient at both activities.
If the cost of a typical basket of goods in the U.S. is $100 and in China it is 500 yuan, and the nominal exchange rate is 10 yuan per dollar, what is the real exchange rate?
A. 1. B. 2. C. 3. D. 4.
Which of the following allows an economist to conclude that the welfare or happiness of society as a whole is clearly increasing?
A) A decrease in nominal GDP B) A decrease in real GDP C) An increase in nominal GDP D) An increase in real GDP E) None of the above.
In the health insurance market, adverse selection occurs when
A) chronically ill people buy health insurance. B) insured people go to the doctor unnecessarily. C) patients sue their doctor. D) people with health insurance tend to behave more recklessly.