Economic efficiency would be primarily discussed in response to which of the fundamental questions about a competitive market economy?
A) What will be produced?
B) How will the goods and services be produced?
C) How will the system accommodate change?
D) Who is to receive the output?
Answer: B) How will the goods and services be produced?
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Amos Long's marginal utility of income function is given as: MU(I) = I1.5, where I represents income. From this you would say that he is
A) risk averse. B) risk loving. C) risk neutral. D) none of the above
If the federal government increases the amount of Social Security benefits for retired persons, then the
a. consumption schedule will shift upward. b. aggregate demand curve will shift outward. c. effect on equilibrium GDP will be the same as a cut in taxes. d. All of the above are correct.
In the short run, average variable cost is always less than average total cost
a. True b. False Indicate whether the statement is true or false