In the circular flow diagram, which of the following is true in resource or factor markets?
(a) Households buy resources from business firms.
(b) Households sell products to business firms.
(c) Households sell resources to business firms.
(d) Business firms and households resources are unlimited.
Answer: (c) Households sell resources to business firms.
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A ____ total cost function implies that marginal costs ____ as output is increased
a. linear; increase linearly b. quadratic; are constant c. cubic; increase linearly d. linear; are constant e. none of the above
Forward and backward linkages apply to which of the following development strategies?
a. big-push development b. government sponsored development c. direct foreign intervention d. unbalanced development e. balanced development
As long as a consumer remains on the same indifference curve,
a. she is indifferent to all points that lie on any other indifference curve. b. her preferences will not affect the marginal rate of substitution. c. she is unable to decide which bundle of goods to choose. d. she is indifferent among the points on that curve.
Government can reallocate resources away from private goods towards public goods, usually through:
A. Import tariffs and quotas B. The laws of supply and demand C. Taxes and government spending D. Positive and negative externalities