Financial intermediaries, through their ability to lower transaction costs:
A. allow for people to be more self-sufficient.
B. reduce the opportunity cost of specialization.
C. make collecting and processing information unprofitable.
D. decrease the efficiency of an economy.
Answer: B
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Comment on the following statement: "I decided to buy a car from a dealer in a town 100 miles away because he was offering a price that was $100 lower than the dealer in my hometown. Therefore, I saved $100"
What will be an ideal response?
One benefit of automatic stabilizers is that they
a. decrease consumption during a recession below what it would otherwise be b. make GDP more volatile c. cause the cyclical deficit to fall during a recession d. increase consumption during a recession above what it would otherwise be e. increase consumption during an expansion above what it would otherwise be
The law of diminishing marginal utility explains why
a. most individual demand curves are straight lines. b. the consumer's optimal purchase is at the tangency of an indifference curve and the budget line. c. most individual demand curves slope downward. d. marginal utility falls when total utility falls.
Efficiency refers to whether a market outcome is fair, while equality refers to whether the maximum amount of output was produced from a given number of inputs
a. True b. False Indicate whether the statement is true or false