In a market economy, the three economic questions are answered by which of the following?
a. Prices determined by the interaction of the forces of supply and demand.
b. A cartel of major transnational corporations, government agencies, and consumer advocates.
c. A trilateral commission of major corporations, the military, and elite university professors.
d. A central authority such as people's committee, a government agency, or a dictator.
a
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Economic growth can be shown by
A) a rightward shift in the aggregate supply curve. B) a leftward shift in the aggregate supply curve. C) a leftward shift in the production possibilities curve. D) no change in the aggregate supply curve.
Figure 9.2 represents the market for used cameras. Suppose buyers are willing to pay $125 for a plum (high-quality) used camera and $25 for a lemon (low-quality) used camera. If buyers believe that 50% of the used cameras in the market are lemons (low quality), how much will they pay for a used camera?
A. $25 B. $50 C. $75 D. $125
Refer to Figure 23.6 for a perfectly competitive firm. If this firm produces the level of output corresponding to point B in the short run, it will earn
A. A loss greater than necessary. B. The minimum loss possible. C. The maximum profit possible. D. A profit, although not the maximum profit possible.
Refer to Scenario 1-1. Had the firm not produced and sold the last 3,000 cell phones, would its profit be higher or lower, and by how much?
A) Its profit will be $6,000 lower. B) Its profit will be $700 lower. C) Its profit will be $700 higher. D) Its profit will be $6,700 higher.