Which fundamental economic question requires society to decide the mix and quantity of goods and services it will produce?
A. The What to Produce question.
B. The Why to Produce question.
C. The How to Produce question.
D. The For Whom to Produce question.
Answer: A
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
Resources are used only in the production of goods, not services
a. True b. False
Consider two firms competing to sell a homogeneous product by setting price. The inverse demand curve is given by P = 20 ? Q. Firm 1 has MC1(Q1) = 2 and firm 2 has MC2(Q2) = 2.25. Based on this information, we can conclude that the market price will be:
A. $2 and each firm will produce 9 units. B. $2.25 and each firm will produce 8.875 units. C. $2 and firm 1 will produce 18 units and firm 2 will produce 0 units. D. $2.24 and firm 1 will produce 17.76 units and firm 2 will produce 0 units.
Use the following table to answer this question, which provides information on the production of a product that requires one variable input.InputTotal Product00102002060030720408205090060980The marginal product of the 40th input item is
A. 100. B. 10. C. 20.5. D. 80.