By free enterprise, we mean that:
A. individuals are free to produce those products that government agencies determine can be produced profitably.
B. individual producers determine how to produce, but government agencies determine what will be produced.
C. individuals may obtain resources, organize production, and sell the resulting output in any legal way they choose.
D. products are provided free to those who cannot afford to buy them.
Answer: C
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If a monopolist faces a linear demand curve, its marginal revenue curve will be:
A) horizontal. B) vertical. C) twice as steep as the demand curve. D) four times as steep as the demand curve.
Is it possible for a firm to have a comparative advantage in producing something without having an absolute advantage? Why or why not?
What will be an ideal response?
In the monetary small open-economy model with a fixed exchange rate, an increase in the world real interest rate
A) increases domestic output and has no effect on the domestic price level. B) decreases domestic output and has no effect on the domestic price level. C) increases the domestic price level and has no effect on domestic output. D) decreases the domestic price level and has no effect on domestic output.
A price ceiling that is set above the equilibrium price:
A. will have no effect on the market. B. will lead to excess supply in the market. C. will lead to excess demand in the market. D. will lead to a black market.