An economy is productive efficient if it produces
What will be an ideal response?
maximum output with given resources and technology.
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A firm can be the sole supplier of a good and is still not a monopolist if
A) the firm is not large. B) the good produced is not important to the economy. C) the firm is not making excessive profits. D) there are very close substitutes for the good.
If a 1 percent change in income generates a greater than 1 percent change in quantity demanded of boating expenditures, then boating is an:
a. example of Engel's law. b. inferior good. c. income inelastic good. d. income elastic good. e. example of a substitute good.
Government intervention in the market
A. Does not involve an opportunity cost if market outcomes are improved. B. Always involves an opportunity cost. C. Never involves an opportunity cost because only market activities result in other goods and services being given up. D. Results in the free-rider dilemma.
If a good has an income elasticity of 1.83, then it:
A. is a luxury. B. probably has a lot of close substitutes available. C. is an inferior good, and a necessity. D. is a normal good, and a necessity.