Define the following terms and explain why they are important in the study of economics.
a. Efficient allocation

b. Laissez-faire

c. Peak pricing

d. Input-output analysis

e. Coordination tasks

What will be an ideal response?


a. An efficient allocation of resources is one that takes advantage of every opportunity to make some individuals better off in their own estimation while not worsening the lot of anyone else. Economists seek efficiency as a means of increasing total satisfaction.b. Laissez-faire refers to a program of minimal interference with the workings of the market system. It means that people should be left alone in carrying out their economic affairs. Under the proper circumstances, a laissez-faire system can lead to economic efficiency.c. Peak pricing is the practice of setting price differently in response to changes in demand over the course of a day, such as rush hour tolls for commuters, or different telephone rates. Peak pricing can increase economic efficiency.d. Input-output analysis is a technical tool used to track the uses of resources in different industries, recognizing the interdependencies of industries upon the output of other industries. Invented by Wassily Leontief, the method is too complex to be used in an economy with thousands of inputs and outputs.e. The coordination tasks of any economy are output selection (how much of each good or service should it produce?), production planning (what inputs should be used to produce each good or service?), and distribution (how should the resulting output be distributed?). Market economies rely on markets to make these decisions; planned economies rely on planning authorities to make the decisions.

Economics

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If an excess quantity of labor demanded exists in a free market, there is a tendency for

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If the firm learns that the complicated technology can be made more stable with a few tweaks increasing the cost by 5.5million and increasing the probability of a launch to 50%. Is it worth for the firm to invest the $500,000 in tweaks?

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D) Stock ownership makes it possible for investors to own a fractional share of a firm's future profits even if they do not participate in the operation of the firm.

A) all of the above are true. B) the stock of a single corporation is purchased. C) the stock may have to be sold within a few months. D) all stocks bought are in the same industry.

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