The way a society uses scarce resources to satisfy its people's unlimited wants is called an economic
a. system
b. utility
c. incentive
d. grid
Ans: a. system
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When Italy buys Boeing jets, the price Italy pays is ________ if it produced its own jets and the price Boeing receives is ________ than it could receive from an additional U.S. buyer
A) lower than; lower B) higher than; higher C) lower than; higher D) higher than; lower E) the same as; higher
Market failure refers to a situation in which the market does not allocate resources efficiently
a. True b. False Indicate whether the statement is true or false
Which of the following is true about advertising?
A. Firms spend money on advertising in an attempt to make the demand curve more elastic. B. Advertising may be the only way that a new entrant can penetrate a market dominated by long-established firms. C. Advertising has no impact on entry costs or market structure. D. Firms consider advertising to be successful if it succeeds in lowering the long-run average cost.
Many economists maintain that
A. the aggregate supply curve is nearly horizontal at low levels of real GDP. B. the aggregate supply curve is nearly vertical at very high levels of real GDP. C. any change in aggregate demand will have most of its effect on output when economic activity is low but on prices when the economy is near full employment. D. All of these responses are correct.