Which is one of the five fundamental questions that need to be dealt with in any economic system?
A. What makes the rate of unemployment low?
B. Who will be the richest group in the economy?
C. How will goods and services be produced?
D. How high should the prices of goods and services be?
Answer: C
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An economist who would most likely use active policy making would support which of the following conclusions?
A) Demand shocks have little or no short-run effects on real Gross Domestic Product (GDP) and unemployment. B) Pure competition is not typical in most markets. C) Price flexibility is common in most markets. D) Supply shocks explain most business cycles.
The Yankee Candle Company, in Hatfield, Massachusetts, makes scented candles. When strawberry-scented candles are made, townspeople enjoy the scent that covers the town. When potpourri-scented candles are made, people stay indoors to avoid the scent. We can infer that if the scented-candle markets are in equilibrium
a. neither strawberry nor potpourri scented candles will be produced b. strawberry candles' prices are higher than the socially optimum c. potpourri candles' prices are higher than the socially optimum d. candle production generates only negative externalities e. candle production technologies are inefficient
In which of the following circumstances would a buyer be indifferent about buying a good?
a. The amount of consumer surplus the buyer would experience as a result of buying the good is zero. b. The price of the good is equal to the buyer's willingness to pay for the good. c. The price of the good is equal to the value the buyer places on the good. d. All of the above are correct.
Refer to the above figure. If real Gross Domestic Product? (GDP) is? $6 trillion, then unplanned business inventories will
A. fall.
B. rise.
C. be zero.
D. be equal to planned inventories.