What is an advantage of a command economy?
a. basic services such as healthcare can be provided to all citizens
b. innovation and new ideas result in great wealth for entrepreneurs
c. starvation is impossible
d. the production of consumer goods is a top economic priority
Answer: a. basic services such as healthcare can be provided to all citizens
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Refer to Figure 11-11. What is the amount of excess capacity?
a. Q4 - Q3 units b. Q3 - Q2 units c. Q3 - Q1 units d. Q4 - Q2 units
Suppose you are the manager of Sweet Aroma, a firm that specializes in air freshener. To make your air freshener, you purchase apple skins from apple juice manufacturers. If the demand for apple juice increases, this will cause the production of apple skins to ________ and the price of apple skins to ________.
A) decrease; rise B) increase; rise C) decrease; fall D) increase; fall
Inflation presents risk because:
A. there is no certainty regarding what inflation will be in the future. B. there are different ways to measure it. C. inflation is always present. D. inflation cannot be measured
If regulators force a natural monopoly to price as a perfectly competitive firm would, the natural monopolist
A. will experience a rise in long-term average costs. B. will experience a lower marginal cost. C. will expand its output. D. will earn an economic loss.