The provision of a legal system is an important economic function of the government because
A) lawyers and judges tend to be high-income people.
B) people need to feel safe when they go to work.
C) the legal system affects how exchange takes place through its enforcement of contracts.
D) the legal system affects the distribution of income through its awarding of damages in accident claims.
C
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Product differentiation involves making a product that is
A) slightly different from the products of competing firms. B) no different than the products of competing firms. C) very different from the products of competing firms. D) completely different from the products of competing firms. E) cheaper than the products of competing firms.
The second step of the four step process is to
a. identify the new equilibrium and then compare the original equilibrium price and quantity to the new equilibrium price and quantity. b. decide whether the economic change being analyzed affects demand or supply. c. draw a demand and supply model before the economic change took place. d. decide whether the effect on demand or supply causes the curve to shift to the right or to the left, and sketch the new demand or supply curve on the diagram.
An economy is operating with optimum efficiency if
a. the price of the product is greater than marginal cost. b. the production of more of commodity A entails the production of less of commodity B. c. marginal cost of output is greater than marginal utility of output. d. an increase in output would result in a decrease in average cost per unit.
If the price of Verizon cell phones falls, what will happen to the demand curve for Verizon sales people?
a. It will shift to the right. b. It will shift to the left. c. The direction of the shift is ambiguous. d. It will remain unchanged.