When the invisible hand is at work,
a. the price system will sometimes give incorrect cost signals to consumers.
b. the price system will allocate resources based only on consumer need.
c. all prices will be set equal to marginal costs.
d. there will be some shortages and surpluses that cannot be avoided.
c
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Which of the following would not enhance economic growth?
a. Subsidies for investments in physical capital b. An increase in the corporate profits tax c. Subsidies for investments in human capital d. A tax cut that encourages saving e. Subsidies for research and development expenditures
In the graph above, a government imposed price of $35 represents a price _____ and there is a _____.
A. floor; surplus
B. floor; shortage
C. ceiling; surplus
D. ceiling; shortage
Most economists agree that the best rate of inflation for a stable economy would be around:
A. five to six percent. B. zero. C. seven percent. D. two to three percent.
A firm that can determine the price-output combination in order to maximize profit is known as a
A) price searcher. B) price taker. C) demand searcher. D) cost taker.