A social system could eliminate profits and losses if it could
A) eliminate greed and selfishness.
B) eliminate uncertainty.
C) fix all prices to reflect opportunity costs.
D) fix all prices to reflect the value of the labor embodied in goods.
E) tax all receipts above cost and redistribute them to firms unable to cover all their costs.
B
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One effect of inflation is that it is a tax that redistributes goods and services from
A) investors to savers. B) households and businesses to the government. C) businesses to households. D) government to households. E) government to businesses.
The law of comparative advantage indicates that
a. specialization and exchange will permit trading partners to maximize their joint output. b. a nation can gain from trade only if it is not at an absolute disadvantage in producing all goods. c. a nation can gain from trade only when its trading partners are not low-wage countries. d. countries should export products for which they are high-opportunity cost producers.
If a firm is losing money, this implies that
a. consumers do not understand the value of the product. b. the value of the resources used to make the product is being reduced. c. the firm must go out of business immediately. d. this product cannot be produced profitably in the long run.
Which of the following statements is false?
a. An upward-sloping supply curve graphically represents the law of supply. b. A vertical supply curve graphically represents the law of supply. c. If income rises and good X is a normal good, then the demand for good X will rise. d. If income falls and good Y is an inferior good, then the demand for good Y will rise