On a microeconomic level in competitive markets, prices are determined by
A) the interaction of supply and demand
B) how much people feel like they need an item
C) the greed of corporate executives
D) unknown forces sometimes called "animal spirits"
Answer: A) the interaction of supply and demand
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The "big tradeoff" refers to the point that governmental redistribution of income causes
A) less efficiency because it weakens incentives to work. B) less efficiency because it strengthens incentives to work. C) more efficiency because it weakens incentives to work. D) more efficiency because it strengthens incentives to work.
Refer to Figure 9-2. With the tariff in place, the United States
A) imports 16 million pounds of rice. B) imports 15 million pounds of rice. C) imports 9 million pounds of rice. D) exports 31 million pounds of rice.
In which of the following is the relationship of price (P) to marginal cost (MC) such that the gains to society as a whole from producing additional marginal units will be greater than the costs?
a. P = MC b. P > MC c. P > MC d. P / MC
In calculating the net exports component of GDP, exports
a. and imports are subtracted b. and imports are included c. and imports are equal d. are included and imports are not e. are included and imports are subtracted