Which one of the following is not a barrier to an efficient allocation of resources?
a. Equity considerations
b. Free rider effects
c. Transactions costs
d. Holdout effects
e. Poorly defined property rights
Ans: a. Equity considerations
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In situations where businesses who choose to discriminate because they are prejudiced are few in an industry, discrimination:
A. will be eliminated by the competitive market. B. will persist because customers will not give them patronage. C. will persist in an efficient market. D. None of these is true.
A tax burden falls more heavily on the side of the market that
a. has a fewer number of participants. b. is more inelastic. c. is closer to unit elastic. d. is less inelastic.
What is happening at point C?
a. Consumers are preordering products.
b. Consumers have maxed out their credit.
c. Inventories are being sold off to meet demand.
d. Excess production is being stored in inventories.
What is meant by the term business cycle as described by economists?
What will be an ideal response?