How does the task of production planning happen in a laissez-faire economy?
What will be an ideal response?
Under laissez-faire, it is the price system that apportions labor, fuel, and other inputs among different industries in accord with those industries’ requirements. In a free market, inputs are assigned to the firms that can make the most productive (most profitable) use of them. Firms that cannot make a sufficiently productive use of some input will be priced out of the market for that item.
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Which government undertook significant infrastructure projects in the mid-1990s to improve roads and public works, which in turn increased the stock of physical capital and ultimately economic growth?
a. South Korea b. the United States c. Japan d. China
This figure displays the choices being made by two coffee shops: Starbucks and Dunkin Donuts. Both companies are trying to decide whether or not to expand in an area. The area can handle only one of them expanding, and whoever expands will cause the other to lose some business. If they both expand, the market will be saturated, and neither company will do well. The payoffs are the additional profits (or losses) they will earn.The outcome of the game in the figure shown predicts that Starbucks will earn profits of:
A. -$1 million. B. -$2 million. C. $2 million. D. $0 million.
There are never shortages or surpluses when the price in a market is equal to the equilibrium price for the market.
Answer the following statement true (T) or false (F)
Firms are able to expand their operations by acquiring funds from households. They can do this directly through financial markets such as ________, or indirectly through financial intermediaries such as ________
A) stock markets; bond markets B) stock markets; banks C) banks; bond markets D) bond markets; stock markets