An example of a shortage is limited amounts of:
a) water available for irrigating a crop because it is used for other crops
b) labor available because the workers have other jobs
c) food available because the trucks carrying it are on strike
d) food available because few people want to buy it
Ans: c) food available because the trucks carrying it are on strike
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A deadweight loss of consumer and/or producer surplus occurs when
a. producers fail to maximize profits. b. mutually beneficial transactions cannot be completed. c. consumers do not maximize their utility. d. the price of inputs increases.
If labor markets are competitive, discriminating employers: a. suffer no economic consequences from discrimination
b. incur higher costs as a result of discrimination and are therefore at a competitive disadvantage. c. incur lower costs than nondiscriminating employers and therefore have a competitive advantage. d. enjoy higher profits.
One major fault with factor pricing analysis is that marginal productivity theory merely attempts to justify the income distribution that the capitalist system yields
a. True b. False Indicate whether the statement is true or false
The rationing function of prices means that
A) government is responsible for setting the prices of basic foods. B) all goods and services are produced by large firms. C) businesses determine what goods consumers should purchase. D) buyers and sellers synchronize their decisions through the price system.