Price is the coordinating mechanism in a laissez-faire economy.
Answer the following statement true (T) or false (F)
True
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An amusement park is an example of a pure private good
Indicate whether the statement is true or false
An increase in the supply of loanable funds, other things constant, will increase the interest rate
a. True b. False Indicate whether the statement is true or false
If the MPP of labor is 60 and the price of labor per period is $20, the MPP of machinery is 75 and the price of the machinery per period is $25, in order to achieve optimal input proportions the firm should use
a. more labor and less machinery. b. more machinery and less labor. c. more labor with the same amount of machinery. d. the current combination.
If there are no profits in competitive equilibrium, why do firms produce? How can they stay in business?