If government intervention in the market creates market inefficiencies then
A) there is government failure.
B) market failure.
C) network externalities.
D) the economy must be democratic.
A
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Which economist believes all profits are derived from the exploitation of workers?
A. Frank Knight B. Joseph Schumpeter C. Karl Marx D. John Maynard Keynes
Which of the following provides the best evidence of the specialization of labor?
a. a firm that produces a line of related products, such as eight kinds of breakfast cereal b. an architect who is willing to practice in only one geographic area c. a physician who practices cardiology and orthopedic surgery d. a family that eats at Wendy's every Thursday night e. a retailer who sells goods but does not provide services
A firm produces its product using both capital and labor. When it does not change its capital usage, but doubles its labor input, its output increases by less than 50 percent. Which of the following is the most likely explanation of this finding?
A. the principle of opportunity cost B. the principle of diminishing returns C. the marginal principle D. the spillover principle
Jill Borts believes that the price elasticity of demand for her economics textbook is relatively inelastic. She argues "I was told I had to purchase a book written by Hubbard and O'Brien that is required by my instructor. If I wanted to buy a mystery
novel I would have many authors to choose from. Therefore, the demand for mystery novels is more elastic than the demand for my textbook." Is Jill correct? A) The demand for the textbook is more inelastic, but Jill's reasoning is incorrect. The reason the textbook has an inelastic demand is that it is more expensive than any novel. B) She is correct. C) She is confused. She should have concluded that the textbook has a more elastic demand than a novel. D) She is correct that the textbook has a more inelastic demand, but that is because most students pay for their textbooks with credit cards. Most people pay for novels and other books with debit cards.