Prices usually allocate resources efficiently because they allocate
A. consumption to the highest cost of good or service.
B. resources to the lowest value good or service.
C. consumption to the lowest value good or service.
D. resources to the highest value good or service.
Ans: D. resources to the highest value good or service.
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Answer the following statement(s) true (T) or false (F)
1. The economic model of supply and demand is one that can be tested using data. 2. When an economist talks about equilibrium he is specifically discussing a situation where the quantity supplied equals the quantity demanded. 3. The fact that grocery stores and convenience stores sell physically identical products for different prices is a violation of the "law of one price. 4. In the supply/demand model, prices and quantities are exogenous variables. 5. While the model o'False supply and demand has been around 'Falseor a long time, it has survived more because it mimics reality than because it actually predicts something.
Money performs all of the following functions EXCEPT serving as a
i. medium of exchange. ii. unit of account. iii. barter mechanism. A) iii only B) ii only C) i only D) ii and iii E) i and ii
Refer to the above figure. Point B is known as
A) a peak. B) a recession. C) an expansion. D) a contraction.
Higher gasoline prices would likely raise the price of large, gas-guzzling automobiles
a. True b. False Indicate whether the statement is true or false