The competitive market process tends to promote economic prosperity because it
a. keeps the prices of goods higher than their production costs.
b. creates inefficiencies, which causes people to economize.
c. directs self-interested action toward the production of goods that are highly valued relative to their cost.
d. sends signals to the government about which goods to produce.
C
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Refer to Table 18-3. The table above outlines the rankings of three members of the U.S. Senate on three spending alternatives
Assume that Congress can spend additional revenue on only one of the three spending alternatives and that Bart, Lisa, and Maggie, all members of the Senate, participate in a series of votes in which they are to determine which of the spending alternatives should receive funding. Three votes will be taken: (1 ) Immigration Reform and Unemployment Benefits (2 ) Immigration Reform and Social Security Reform and (3 ) Unemployment Benefits and Social Security Reform.
One major characteristic of the price system is that
A. individual sellers ultimately decide what is produced in the market. B. consumers together are the ones who ultimately decide what is produced. C. all exchanges are regulated by the government. D. competition among sellers is reduced.
If a negative externality exists in the production of paper and paper is sold in a perfectly competitive market, at the equilibrium output:
A. additional net gains to society are not possible from either increasing or decreasing the output of paper. B. the marginal social benefit of paper equals its marginal social cost. C. additional net gains to society are possible by increasing the output of paper. D. additional net gains to society are possible by reducing the output of paper.
The willingness of firms to hire labor is represented by the market labor demand curve.
Answer the following statement true (T) or false (F)