Consumer sovereignty is the freedom to
a. start a business
b. defend one's property against theft
c. negotiate price in the market
d. buy or not buy goods and services
e. consume what one needs
D
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Why is it impossible to make everyone better off in the long run by imposing import restrictions?
What will be an ideal response?
If the domestic income of a nation’s citizens increase thus causing consumption spending to increase, then we generally expect net export spending to:
A. increase as well because as consumption increases we also buy more foreign goods and services. B. decrease as well because as consumption increases we also buy more foreign goods and services. C. remain constant because when we increase domestic purchases it is directly offset by a reduction in foreign purchases. D. there is not enough information to determine what would happen.
Firms need to borrow for operating purposes because they
A. need constant bailouts. B. are always in debt. C. need to pay for goods and services before they will have revenue from their sales. D. need to pay for goods and services after they have sold them.
Assume the wool industry is perfectly competitive. Why is it difficult for a wool producer to make excess profits in the long run?
A. the fact that the demand curve facing each wool producer is perfectly elastic B. the assumption that wool producers in the industry do not ?differentiate? their products C. the fact that wool producers are ?price takers? D. There is free entry into the wool industry.