Which of the following is not a question that scarcity forces all societies to answer?
a. Which goods and services are to be produced?
b. How are goods and services to be produced?
c. Who will get the goods and services produced?
d. How can scarcity be eliminated?
d
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"Because chips and salsa are complements, an increase in the price of chips will cause the demand for salsa to decrease
This initial shift in demand for chips results in a higher price for chips; this higher price will cause the demand curve for chips to shift to the right." Which of the following correctly comments on this statement? A) The statement is false because one cannot assume that chips and salsa are complements for all consumers. B) The statement is false because a change in the price of chips would not change the demand for chips. C) The statement will be true if consumer tastes for chips and salsa do not change. D) The statement is false because salsa is an inferior good; chips are normal goods.
Leakages in the circular flow model are
A) caused by people not acting rational. B) possible when unemployment exists. C) reflected in the vertical long-run aggregate supply curve. D) caused by people saving instead of spending.
In the short run, the lowest price that a perfectly competitive firm will accept without closing its doors is found by examining the average variable cost curve.
Answer the following statement true (T) or false (F)
Suppose the current one-year interest rate is 3%, and financial markets expect the one-year interest rate next year to be 5%. Given this information, the yield to maturity on a two-year bond will be approximately
A) 4%. B) 6%. C) 8%. D) 12%. E) none of the above