Market economies produce only a few relatively minor defects.
Answer the following statement true (T) or false (F)
False
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In the circular flow of income
A) households demand goods and services that are supplied by firms, and the firms demand factors that are supplied by intermediate firms. B) households demand goods and services that are supplied by firms, while supplying factors that are demanded by firms. C) households sell goods and services while firms sell factors. D) households buy goods and services while firms sell goods and services. Firms obtain labor from households, capital from government, and raw materials from other firms.
The figure above shows the demand for and supply of labor of students in Smallville. If the minimum wage is set at $6 per hour, how many hours of students' labor are unemployed?
A) 12,000 hours B) 9,000 hours C) 6,000 hours D) 0 hours
Natural resource cartels such as OPEC are inherently unstable because their members operate with excess capacity and have an incentive to cheat on their output quotas
Indicate whether the statement is true or false
For a monopolistically competitive market, the number of firms in the market implies that
A) each firm faces a perfectly elastic demand. B) all firms will make losses. C) each firm acts independently of other firms. D) firms will collude to set monopoly price and output.