The basic cause of deadweight losses from the existence of common resources and externalities is
A) the use of a market system to deal with scarcity.
B) the self-interested rationality of human beings.
C) the absence of government intervention.
D) a lack of clearly defined and enforceable property rights.
D
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The principle that the cost of something is equal to what is sacrificed to get it is known as the
A) reality principle. B) marginal principle. C) principle of opportunity cost. D) principle of diminishing returns.
In the case where the spot and forward rates are equal, the currency is said to be selling
A) profitably. B) flat. C) normal. D) risky.
Refer to Figure 6.4. If the price of computers is $1,000, then expenditures on computers is represented by the area:
A. c + d
B. c
C. b + c
D. a + b + c
Households supply factors of production to businesses and are paid by businesses for doing so. The market where this interaction takes place is called the factor market.
Answer the following statement true (T) or false (F)