Prices below the free market equilibrium price are inefficient because:
A. they prevent mutually beneficial transactions.
B. no one can be made better off without hurting someone by participating in another transaction.
C. all mutually beneficial transactions happen.
D. more goods could be produced using society's resources.
Answer: A
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Diseconomies of scale exist over the range of output for which the long-run average cost curve is:
a. constant. b. falling. c. rising. d. subject to diminishing returns.
All the goods and services we produce are ____________ .
a. expensive. b. scarce. c. recyclable. d. efficiently produced.
Beginning from a position of long-run equilibrium at the full-employment level of real GDP, the economy's short-run response to an increase in the aggregate demand curve would be:
A. a movement upward along the short-run aggregate supply curve. B. a movement upward along the long-run aggregate supply curve. C. a downward shift in the short-run aggregate supply curve. D. a shift in both the aggregate demand curve and the short-run aggregate supply curve with a movement along the long-run aggregate supply curve.
Monetarists believe that real output is determined by
A. aggregate supply. B. government planning. C. the rate of growth of the money supply. D. government spending.