One of the features of the circular flow model is that it shows the:
a. interaction between the government and firms in the financial market
b. interaction between employers and employees in the labor market.
c. interaction between households and firms in the market for goods and services.
d. interaction between large business houses and households in the financial market.
c
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Which of the following is an example of a common pool resource?
A) a lighthouse B) burritos C) a high school football game D) redwood forests
A plant uses machinery and waste water to produce steel. The owner of the plant wants to maintain an output of 10,000 tons a day, even though the government has just imposed a $100 per gallon tax on using waste water
The reduction in the amount of waste water that results from the imposition of this tax depends on A) the amount of waste water used before the tax was imposed. B) the cost to the firm of using waste water before the tax was put in place. C) the rental rate of machinery. D) the marginal product of waste water only. E) the ratio of the marginal product of waste water to the marginal product of machinery.
We cannot predict the effect on the equilibrium quantity, but know that the market clearing price will decrease when
A) supply increases and demand increases. B) supply decreases and demand decreases. C) supply decreases and at the same time demand increases. D) supply increases and at the same time demand decreases.
An example of government investment in physical capital to increase business productivity is:
A. roadways. B. bridges. C. sewer systems. D. All of these are examples of ways governments can increase productivity.