Which concept explains how individual consumers in market economies determine what is to be produced?
a. competition
b. consumer sovereignty
c. decentralized decision-making
d. free enterprise
b
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How do critics of discretionary stabilization policy view frequent changes in spending and tax policy?
a. The changes make the economy smoother, although it may not look that way to individual firms. b. The changes make life more difficult and hectic for Congress and the Fed. c. The changes smooth out the business cycle, making planning easier. d. The changes cause more instability in the economy and make planning more difficult.
A major criticism of industrial regulation is that:
A. it has been applied to virtually all major U.S. corporations in the post-Second World War period. B. marginal cost pricing has created an underallocation of resources. C. by allowing a fair return price, it gives natural monopolists little incentive to contain costs. D. regulatory commissions have frequently caused natural monopolies to go bankrupt.
If Nick consumes only two goods, oranges and plums, and he increases his consumption of oranges, then
a. the price of oranges must have increased b. Nick's income must have increased c. plums and oranges must be complements d. he must reduce his consumption of plums to remain on the same indifference curve e. Nick's MU/P of oranges will now increase
The additional utility derived from consuming one more unit of some good or service is called ____________.
Fill in the blank(s) with the appropriate word(s).