An explanation for how the price of water can be less than the price of diamonds, even though water is more valuable, is that
a. price is a poor guide to value.
b. markets for water and diamonds are not competitive.
c. price reflects marginal value, not total value.
d. diamond production requires more labor, and value is based on labor.
c. price reflects marginal value, not total value.
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Which of the following is not an appropriate policy for a central bank to follow if the economy is plagued with deflation?
A) consistently pursuing policy to promote the credibility of the central bank B) explicitly and credibly targeting inflation C) using expansionary monetary policy to drive down interest rates D) increasing the target interest rate on overnight loans
When a market consists of a few large firms and barriers to entry exist, it:
A. must be perfectly competitive. B. is likely an oligopoly. C. must be monopolistically competitive. D. is likely a monopoly.
Government action can usually perfectly correct the market's shortcomings
a. True b. False Indicate whether the statement is true or false
Sweden and Norway are usually described as ________________ economies.
Fill in the blank(s) with the appropriate word(s).