In every economic system, choices must be made because resources
A) are unlimited, but human desires and wants are limited.
B) are limited, but human desires and wants are unlimited.
C) are unlimited, and so are human desires and wants.
D) are limited, and so are human desires and wants.
B
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Suppose a monopolist is producing a level of output such that MR > MC. What should the firm do to maximize its profits?
A) The firm should do nothing — it wants to maximize the difference between MR and MC in order to maximize its profits. B) The firm should hire less labor. C) The firm should increase price. D) The firm should increase output.
A fiscal policy action to close a recessionary gap is to:
A. increase taxes. B. increase the marginal propensity to consume. C. decrease transfer payments. D. increase government purchases.
Which of the following factors has been the dominant source of economic growth in the U.S. (except in 1973-1995)?
A. Increase in population B. Increase in labor productivity C. Increase in hours per worker D. Increase in labor force
The Weber-Fechner law is the relationship according to which the perceived change in any stimulus:
A. depends upon the ease with which it is possible to summon similar changes from memory. B. varies depending upon whether the change triggers loss aversion. C. varies according to the size of the change measured as a proportion of the original stimulus. D. depends upon an initial approximation, which is then updated in accordance with additional information.