Which of the following is most limited in scope under a pure market economy?
a. Freedom of choice
b. Consumer sovereignty.
c. Entrepreneurship.
d. Government.
d
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Freezing temperatures in California have sharply reduced the supply of oranges in the U.S. You predict that the price of oranges will ________, and the more elastic the demand for oranges, the ________ will be the effect on the price
A) fall; smaller B) fall; greater C) rise; smaller D) rise; greater
Goods or services that can be produced only by using unique or rare productive resources tend to have a low elasticity of supply
Indicate whether the statement is true or false
For two goods, X and Y, to be classified as substitutes, it must be the case that:
A. X and Y are identical. B. when the price of X rises, the demand for Y increases. C. when the price of X rises, the demand for Y decreases. D. consumers tend to purchase both items together.
In the long run, monopolistically competitive firms will not earn economic profits because
A) average total cost will shift up to meet the demand curve. B) input prices will be bid up. C) production will not be at minimum average cost. D) new firms will enter the industry.