Which of the following is not a function of prices in a market system?
a. Prices have the crucial job of balancing supply and demand.
b. Prices send signals to buyers and sellers to help them make rational economic decisions.
c. Prices coordinate economic activity.
d. Prices ensure an equitable distribution of goods and services among consumers.
D
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During the demographic transition the population growth rate
a. slows down b. rises c. rises and then slows down d. increases in spurts followed by long periods of stagnancy e. none of the above
The two deadweight triangles are the Consumption distortion and Production distortion losses. It is easy to understand why the Consumption distortion constitutes a loss for society
After all it raises the prices of goods to consumers, and even causes some consumers to drop out of the market altogether. It seems paradoxical that the Production distortion is considered an equivalent burden on society. After all, in this case, profits increase, and additional production (with its associated employment) comes on line. This would seem to be an offset rather than an addition to the burden or loss borne by society. Explain why the Production distortion is indeed a loss to society, and what is wrong with the logic that leads to the apparent paradox.
Which of the following must be true if average total cost is rising?
A. Average fixed cost must be rising. B. Total fixed cost must be rising. C. Average variable cost must be falling. D. Marginal cost must be greater than average total cost.
The majority of the poor are
A. Hispanic. B. white, non-Hispanic. C. black, non-Hispanic. D. no one ethnic group makes up the majority.