Under laissez-faire, the allocation of resources among different products depends on
A. consumer preferences.
B. production costs.
C. Both a and b are correct.
D. Neither a nor b is correct.
Answer: C
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Which of the following underground economy activities would be considered a black market?
A. Harry makes Sally dinner while she changes the oil in his car. B. Carrie waits tables at the local restaurant for salary and tips, but only reports her salary as income. C. Celeste sells counterfeit designer bags at a roadside stand. D. Ben provides child care in his home for cash payments and does not report the income.
Suppose a movie theater raises its ticket prices by 10% and the total revenue it receives in ticket sales doesn't change one bit from the previous week
What can you say about the price elasticity of demand at that new price? Could this go on indefinitely? In other words, would continued price increases leave total revenue unchanged without bound? Why or why not?
If the Fed sells U.S. government securities to drain reserves from banks, which of the following is most likely to occur? a. The demand for money will increase and the interest rate will rise
b. The money supply will increase and the interest rate will fall. c. The interest rate will rise and the quantity of money demanded will fall. d. The money supply will decrease and the interest rate will fall. e. The interest rate will fall and the quantity of money demanded will increase.
Answer the following statements true (T) or false (F)
1. When U.S. citizens travel on United Airlines to Japan, this constitutes a debit in the U.S. balance of payments. 2. The financial account includes income earned on investments made in prior years. 3. When a U.S. citizen buys goods from a foreign merchant, the goods are usually paid for by having the U.S. citizen send a personal check or dollars directly to the exporter. 4. Although prices in the United States and France may be stable, changes in the exchange rate between dollars and euros can make the actual cost of trade more expensive for one or the other. 5. As the price of foreign exchange increases in terms of the U.S. dollar, U.S. products become cheaper for foreigners to buy.