In the United States, resources are most often allocated by
A) market price.
B) command system.
C) lottery.
D) contest.
A
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The interest rate effect suggests that
A) an increase in the price level decreases the interest rate, which causes businesses and consumers to reduce desired spending. B) an increase in the price level increases the interest rate, which causes businesses and consumers to reduce desired spending. C) an increase in the price level increases the money supply, which causes businesses and consumers to increase desired spending. D) a decrease in the price level decreases the interest rate, which causes businesses and consumers to reduce desired spending.
Which of the following statements best reflects a price-taking firm?
a. If the firm were to charge more than the going price, it would sell none of its goods. b. The firm has an incentive to charge less than the market price to earn higher revenue. c. The firm can sell only a limited amount of output at the market price before the market price will fall. d. Price-taking firms maximize profits by charging a price above marginal cost.
One trend in labor markets is:
A. a decrease in average real wages in the United States and other industrial countries. B. an increase in the rate of real wage growth since the early 1970s. C. increasing wage inequality in the United States. D. weak rates of job creation in the United States since 1980.
Economics involves marginal analysis because:
A. most decisions involve changes from the present situation. B. marginal benefits always exceed marginal costs. C. marginal costs always exceed marginal benefits. D. much economic behavior is irrational.