When competition is present and property rights protected and enforced, market prices will
a. discourage profit-seeking business firms from producing efficiently.
b. direct entrepreneurs toward production of goods that are inferior in quality.
c. encourage self-interested individuals to develop skills that are expected to be valuable in the future.
d. always decrease.
C
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The price of a new textbook is $120 in one year and is $150 two years later, while the price of a used copy of the text increased from $40 to $60. The relative price of a new textbook
A) increased from 3 to 4.5. B) decreased from 0.8 to 0.67. C) decreased from 3 to 2.5. D) remained constant.
The relationship between the number of hours a student studies for an exam and the exam grade is most likely graphed as
A) a line sloping down from upper right to lower left. B) a line sloping down from upper left to lower right. C) a line sloping up from lower left to upper right. D) a line sloping up from lower right to upper left.
At the equilibrium level of income it must be true that total
a. income equals total spending. b. product equals total output. c. output equals total inventory. d. income equals total saving.
The underground economy can be described as
A) production of intermediate goods and services. B) economic production that includes mining. C) economic activity that is hidden from the government to avoid taxes or because the activity is illegal. D) production of infrastructure that spurs growth in the rest of the economy.