Which of the following contributed to the downfall of the Soviet Union in 1991?
A) government dissatisfaction with high living standards and political freedom
B) an inability to produce low-cost consumer goods that households wanted
C) an overabundance of high-quality goods and services
D) the lack of a strong dictator who could coordinate economic activities
Answer: B
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In monopolistic competition, barriers to entry give the firms the power to set their price
Indicate whether the statement is true or false
Which of the following will not cause a change in demand for crackers?
a. a change in consumers' income b. a change in the price of crackers c. a change in the price of cheese d. a change in the number of cracker-eaters e. a change in consumers' tastes for crackers
When economists use market values to aggregate output, they sum the:
A. price times the quantity of each item produced. B. inputs of each item produced. C. number of items produced. D. quantity of items produced.
Answer the question on the basis of the following information: Suppose a firm hires both labor (L) and capital (C) under purely competitive conditions. The price of labor is P L and that of capital is P C . The marginal product of labor is MP L and that
of capital is MP C . The firm sells its product competitively at a price of P X . Refer to the given information. Which of the following must pertain if the firm is to minimize the cost of producing any output? A. MP C = MP L = P X . B. MP C = P C and MP L = P L . C. MP C /P C = MP L /P L . D. MP C /P X = MP L /P X .