The existence of scarcity in economics comes from
A) resources being limited in supply.
B) people being stupid.
C) governments being corrupt.
D) the rich controlling most resources.
A
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The optimal currency area involves a trade-off of reducing transaction costs but the inability to use changes in exchange rates to help ailing regions. If the US, Canada, and Mexico had one single currency (the Peso-Dollar) we would tend to see all of the following EXCEPT:
a. Even more intraregional trade of goods across the three countries. b. Lower transaction costs of trading within North America. c. A greater difficulty in helping Mexico as you can no longer deflate the Mexican peso. d. Less migration of workers across the three countries. e. An elimination of correlated macroeconomic shocks across the countries.
A temporary decrease in the price of oil will shift the short run aggregate supply curve right but not shift the long run aggregate supply curve
a. True b. False Indicate whether the statement is true or false
If firms are producing at a profit-maximizing level of output where the price exceeds the average total cost:
A. other firms will exit the market. B. accounting profits must be positive, but economic profits are zero. C. firms will exit the market. D. economic profits must be positive.
Suppose we observe the following two simultaneous events in the market for fish. First, there is a decrease in the demand for fish due to changes in consumer tastes. And second, there is a reduction in seafood supply due to oil spills in the oceans. We
know with certainty that these two simultaneous events will cause which of the following? A) no change in the equilibrium quantity and a reduction in the equilibrium price B) an increase in the equilibrium quantity and in the equilibrium price C) a decrease in the equilibrium quantity and an indeterminate change in the equilibrium price D) a decrease in the equilibrium quantity and an increase in the equilibrium price