What type of economic system is commonly described as being controlled by an "invisible hand"?
A. a traditional economy
B. a command economy
C. a market economy
D. a communist economy
Answer: C
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If you save more because Social Security motivates you to provide a greater level of inheritance for your children, then this is referred to by economists as the
A. slovenly effect. B. bequest effect. C. asset substitution effect. D. induced retirement effect.
If two factors of production are substitutes in production, then a decrease in plant size will make the total product curve
a. higher and steeper. b. lower and steeper. c. higher and more shallow. d. lower and more shallow.
Suppose a Chinese restaurant provides free tea and fortune cookies to its customers. The restaurant is clearly
A) generating a negative externality. B) generating a positive externality. C) selling food below cost. D) attempting to increase its total profit. E) doing none of the above.
The tendency to deviate from sound long-run plans in the short-run is known as ________
A) the failure of adaptive expectations B) the failure of rational expectations C) the time inconsistency problem D) the NIMBY, or not in my backyard problem