Economic activity initiated by market participants imposes costs on free riders
Indicate whether the statement is true or false
F
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In any country, the population will generally be better off as long as the ____ over time and population ____
a. quantity and quality of output decreases; does not increase faster than real output b. quantity and quality of output increases; increases faster than real output c. quantity and quality of output increases; does not increase faster than real output d. technology improves; increases faster than real output
Two car dealers have lots across the street from each other. Frank decides that he is going to raise his prices. Sandra decides to drop her prices. Which of the following scenarios is one in which Frank could make money?
a. Customers assume that higher prices mean more inventory. b. Sandra’s prices are lower than Frank’s. c. Another dealer has lower prices than both Sandra and Frank. d. Customers assume that higher-priced cars must be of higher quality.
Investors are often willing to pay positive prices for shares of firms that have never earned a profit because the investors
a. do not know the firms have never earned a profit. b. expect the firms to have positive net earnings in the future. c. expect that interest rates will rise in the future. d. expect that higher rates of inflation will push stock prices higher in the future.
Stagflation refers to a situation in which the economy is experiencing:
A. high economic growth and high inflation. B. low economic growth and high inflation. C. high economic growth and low inflation. D. low economic growth and low inflation.