In a free market system, competition generates economic efficiency only when
A. firms are motivated by a sense of the greater good, not their desire for profit.
B. economic decisions are taken out the hands of individuals and placed in the hands of government officials.
C. consumers are motivated by a sense of the greater good, not their own self-interest.
D. individuals take into account the full opportunity cost of their actions.
Answer: D
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An advertising race among oligopolists may be rational if it
a. is defense advertising. b. raises entry barriers. c. increases cost per unit of sales. d. encourages new entrants.
GDP is the market value of all final goods and services produced by a country's citizens in a given period of time
a. True b. False Indicate whether the statement is true or false
Assume Jack received all As in his classes last semester. If Jack gets all Bs in his classes this semester, his GPA may or may not fall
a. True b. False Indicate whether the statement is true or false
Refer to the graph shown. If a firm operating as if it were faced with a kinked demand curve believes that if it lowers price from P2 to P4, its rival will match the price cut, then:
A. D1 is the relevant demand curve. B. the demand curve used by the firm for decision making is highly elastic. C. it probably won't lower price, since the percentage decline in price will exceed the percentage increase in quantity sold. D. it probably will lower price, since doing so will increase sales.