In a free-market economy, prices coordinate society’s decisions about
A. how and for whom to produce.
B. what, how, and for whom to produce.
C. how and for whom to produce but not how much to produce.
D. how much and for whom to produce but not how to produce.
Answer: B
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The real interest rate is given by:
A) the nominal interest rate adjusted for inflation. B) the nominal interest rate adjusted for changes in exchange rate. C) the nominal interest rate adjusted for income changes. D) the nominal interest rate adjusted for tax rates.
The above table shows production combinations on a country's production possibilities frontier. What is the opportunity cost of one unit of Y when the production of good Y increases from 16 to 28 units?
A) 4 units of good X per unit of good Y B) 3 units of good X per unit of good Y C) 1/4 unit of good X per unit of good Y D) There is no opportunity cost when moving from one point to another along a production possibilities frontier.
The interest rate that the Fed charges when it makes a last resort loan is the ________ rate
A) discount B) short-term C) reserve D) federal funds
Using the table, what is the minimum price that Fred is willing to accept to supply 400 slices of pizza per month?
A) $3.50 B) $2.50 C) $3 D) $4