When price is the rationing criterion, individuals have a strong incentive to
a. ignore the wishes of others when making decisions about how to use their resources.
b. provide services to others in exchange for income.
c. avoid exchanges because in every exchange there will be one person who gains and another who loses.
d. substitute promises for the consistent delivery of a quality product.
B
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Factors likely to cause a financial crisis in emerging market countries include
A) severe fiscal imbalances. B) decreases in foreign interest rates. C) a foreign exchange crisis. D) too strong oversight of the financial industry.
The federal funds rate is
A) the interest rate paid on reserves held with the Fed. B) the interest rate at which banks can borrow excess reserves from other banks. C) the interest rate on bonds issued by the federal government. D) none of the above.
The binary variable interaction regression
A) can only be applied when there are two binary variables, but not three or more. B) is the same as testing for differences in means. C) cannot be used with logarithmic regression functions because ln(0) is not defined. D) allows the effect of changing one of the binary independent variables to depend on the value of the other binary variable.
Refer to the given data. If the prices of labor and capital are $9 and $15 respectively, the profit-maximizing firm will hire:
A. 5 units of labor and 3 of capital.
B. 5 units of labor and 2 of capital.
C. 4 units of labor and 4 of capital.
D. 3 units of labor and 4 of capital.