In the circular flow diagram, firms ________ labor and households ________ goods and services.
A. supply; demand
B. supply; supply
C. demand; supply
D. demand; demand
Answer: D
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Suppose the stock of capital remains constant. By adding more labor, perhaps a second work shift, output
A) remains the same. B) decreases. C) increases. D) becomes more costly.
If the price of a good rises, supply will
A. increase. B. decrease. C. not change. D. the answer depends upon the demand in the market.
According to the theory of rational ignorance, which of the following prevents people from voting?
a. If they feel their vote will not matter in the election b. If they will be required to show voter identification c. If they believe that politicians are unethical d. If they do not belong to a specific political party
What is a shortcoming of price control legislation?
a. Price controls lower the quantity demanded. b. Price controls often lead to reduced product quality. c. Price controls create surpluses. d. All of the above are shortcomings of price controls.