Does voluntary exchange create wealth?
A) Yes, exchange makes it possible for the trading partners to gain more value from the existing supply of goods and it also makes larger output levels possible.
B) Uncertain, it will increase wealth if it creates more goods and services; otherwise it exerts no impact on the wealth of people.
C) No, if one person gains, the other party must lose an equal amount.
D) No, exchange merely shuffles the existing supply of goods and services among people.
A) Yes, exchange makes it possible for the trading partners to gain more value from the existing supply of goods and it also makes larger output levels possible.
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Economic analysis is useful is resolving all of the following types of issues EXCEPT:
A. positive B. monetary policy C. normative D. fiscal policy
Which of the following is not a flow in the circular flow model?
A) the flow of profit and the flow of revenue B) the flow of income earned by households and the flow of expenditures incurred by households C) the flow of revenue received by producers and the flow of payments to resource owners D) the flow of goods and services and the flow of resources to produce goods and services
Which of the following is NOT true for a perfectly competitive firm in the long run?
A) MR = MC B) MC > LAC C) Price = MC D) SAC = LAC
When an economy is operating on its production possibilities curve, more production of one good means less production of another because:
a. resources are limited. b. resources are not perfectly adaptable to alternative uses. c. wants are limited. d. wants are unlimited. e. some resources are not employed.