Does voluntary exchange create wealth (value)?
What will be an ideal response?
Yes, trade generally permits the trading partners to gain more of what they value; this is why they agree to the terms of the exchange.
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Refer to Scenario 6.1. Suppose the friends are forced by government to combine their businesses and share what they make. With this revision to the scenario, the dominant strategy is for Tasha to work ________ and for Gloria to work ________
A) extremely hard; extremely hard B) extremely hard; somewhat hard C) somewhat hard; extremely hard D) somewhat hard; somewhat hard
Define what a market is and provide three examples of where a market can be found
Compared to the situation during the first 125 years of the United States (1790-1915), today total government expenditures are ____ share of the economy, and a greater proportion of those expenditures take place at the ____ level(s)
a. a smaller; federal b. about the same; federal c. a larger; federal d. a larger; state and local
Fixed costs are best defined as
A. costs that will not vary with the firm's output level over some period of time. B. costs that are paid on a yearly basis rather than a weekly or monthly basis. C. costs of inputs that cannot be moved, such as real estate. D. costs that will last as long as the firm exists.