Answer the following questions true (T) or false (F)
1. In a free market there are significant restrictions on how a good or service can be produced or sold.
2. A bed of oysters is not an example of a factor of production but the shucked oysters used to make oyster stew are a factor of production.
3. The payment received by suppliers of entrepreneurial skills is called profit.
1. FALSE
2. FALSE
3. TRUE
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Measuring the intensity of the business cycle requires
a. adding seasonal variations to cyclical fluctuations. b. adding seasonal variations and random fluctuations to cyclical changes. c. eliminating seasonal variations and identifiable random forces from the data. d. multiplying the trend by the cyclical fluctuations.
Which of the following is the most likely effect of lower apple juice prices on the price and quantity purchased of orange juice, a substitute product?
A. The price of orange juice will increase, and the quantity purchased will fall. B. The price of orange juice will fall, and the quantity purchased will increase. C. The price of orange juice will increase, and the quantity purchased will increase. D. The price of orange juice will fall, and the quantity purchased will fall.
Which of the following would most likely generate a positive externality?
A. Pollution B. Education C. Alcoholic beverages D. Roller coaster rides
The efficient level of paper production will occur where the
A) marginal private benefit from consuming paper is equal to the marginal social cost of production. B) marginal social benefit from consuming paper is equal to the marginal social cost of production. C) economically efficient level of the output of paper is equal to the economically efficient level of inputs. D) production of paper no longer produces negative externalities.