Explain why resources are used efficiently in a competitive market
What will be an ideal response?
Resources are used efficiently in a competitive market because the market demand curve is the same as the marginal social benefit curve and the market supply curve is the same as the marginal social cost curve. The equilibrium quantity, determined by where the demand and supply curves intersect, is the same quantity where the marginal social benefit and marginal social cost curves intersect, which is the efficient quantity.
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Full employment is not considered to be zero unemployment because
A) some people do not want a job. B) there are not enough jobs for everyone who wants one. C) some cyclical unemployment always exists. D) people do not find jobs instantaneously.
The business term for economies of scope is
A) economies of scale. B) diversification. C) cooperation. D) synergies.
What do taxes do?
(a) Impact the incentive to use resources efficiently (b) Transfer income from the person or entity paying taxes to other individuals or entities (c) Affect the relative prices of goods, services and resources (d) All of the above
For a given pair of production outputs, the degree of economies of scope:
A) is constant across different output levels. B) only increases as the level of output increases. C) may increase or decrease with output. D) will always tend to zero as output becomes very large.