Which of the following provides a way for millions of producers and consumers to allocate scarce resources?
a. government agency
b. market economy
c. trade organization
d. price controls
b. market economy
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Explain why a firm maximizes its profits by producing the level of output at which marginal revenue equals marginal costs
What will be an ideal response?
At every output level, a firm's short-run average cost (SAC) equals or exceeds its long-run average cost (LAC) because
A) diminishing returns apply in the short run. B) returns to scale only exist in the long run. C) opportunity costs are taken into account in the short run. D) there are at least as many possibilities for substitution between factors of production in the long run as in the short run. E) none of the above
Suppose there is an increase in the price of steel. We would expect the supply curve for steel beams to
a. shift rightward. b. shift leftward. c. become flatter. d. remain unchanged.
Property rights are a tangible factor in producing economic growth
Indicate whether the statement is true or false