Which of the following possibly determines the allocation of goods and services in a free market?
a. The availability of raw materials
b. The cost of production
c. The level of government intervention
d. The ability of the producers to produce a differentiated product
e. The willingness and ability of consumers to pay for the product
e
You might also like to view...
Consider the market for high-end wine. Statistics show that wealthier families spend a greater proportion of their income on high-end wine than do poorer families. If households' incomes rise substantially during an economic recovery, then we can expect
a. an increased demand for high-end wine. b. an increased supply of high-end wine. c. a lower price for high-end wine. d. the demand curve for high-end wine to shift to the left.
Which of the following statements is (are) correct? Keynesians criticize the new classical theory because
a. the new classical model cannot explain changes in expectations. b. of the contracting market characterization of the labor market. c. the rational expectations assumption ascribes an extreme and unrealistic availability of information to market participants. d. All of the above
When talking about aggregate supply, it is necessary to
A) focus on the short run. B) focus on the long run. C) distinguish between the long-run aggregate supply curve and the short-run aggregate supply curve. D) distinguish between the long-run aggregate supply curve and the long run aggregate demand curve when all adjustments to price level changes have been made.
The shortened work week coupled with rising hourly wages in the U.S. economy shows that
A. the income effect has been dominant. B. the substitution effect does not exist at all. C. the U.S. worker is no longer productive. D. workers have become increasingly lazy.