According to the Invisible Hand Theorem, when competitive markets are used to allocate resources
a. no further gains from trade can be created.
b. selfish behavior will cause socially undesirable outcomes.
c. the resulting distribution of income will be fair and equitable.
d. each good's price will equal the value of the labor used in its production.
a. no further gains from trade can be created.
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When the Fed buys government securities
A) reserves increase, leading to a decrease in the money supply by an amount more than the purchase of the government securities. B) reserves increase, leading to a increase in the money supply by an amount more than the purchase of the government securities. C) reserves decrease, leading to a increase in the money supply by an amount more than the purchase of the government securities. D) reserves decrease, leading to a decrease in the money supply by an amount more than the purchase of the government securities.
A necessity (such as food and shelter) generally has an inelastic demand
Indicate whether the statement is true or false
Game theory is the study of which of the following?
a. The prisoner's dilemma b. The behavior of people engaged in recreational games c. The mutual interdependence of firms in oligopolistic industries d. The downward sloping demand curve faced by firms in an oligopoly e. The interaction between marginal and average revenue
Suppose A and B are complementary goods. Other things being equal, the demand curve for A will shift to the right when the price of B goes down
a. True b. False Indicate whether the statement is true or false