Normal profit implies that
A. Economic profit must be negative.
B. Firms will expand their scale of production.
C. The factors employed are earning as much as they could in the best alternative employment.
D. Economic profit must be positive.
Answer: C
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A. credit; labor B. money; labor C. money; consumer goods D. resources; consumer goods
Canned milk was only rationed to babies and small children during World War II. This rationing was an example of allocation by
A) market price. B) first-come, first-served. C) sharing equally. D) force. E) personal characteristics.
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A) adverse selection B) moral hazard C) internalization of externalities D) the paradox of thrift
If a factor of production comes to have more and more alternative uses, its supply curve to any one use
a. remains unchanged. b. becomes more inelastic. c. becomes more elastic. d. may move in any direction.