Which of the following most accurately states the economic significance of voluntary exchange?
a. Goods and services have value because they exist; exchange causes some people to win while others lose.
b. Exchange creates value because it makes it possible for the trading partners to expand total output as the result of specialization and division of labor.
c. Exchange moves goods and services from people who value them more to parties who value the goods less.
d. Exchange cannot create additional value because it does not create additional goods and services.
b. Exchange creates value because it makes it possible for the trading partners to expand total output as the result of specialization and division of labor.
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Alice has $10 to spend on wine and cheese. If wine is $2.50 a glass and cheese $2, draw the corresponding budget line. Then draw three indifference curves, one showing the amount of wine and cheese Alice would choose, one showing less preferred combinations of wine and cheese, and the last showing preferred but unaffordable combinations. ?
What will be an ideal response?
Long-run equilibrium in a monopolistically competitive market is similar to long-run equilibrium in a
perfectly competitive market in that in both markets, firms A) produce at the minimum point of their average total cost curves. B) produce where price equals marginal revenue. C) break even. D) produce where price equals marginal cost.
People who are not currently employed, but say they want a job, are counted as unemployed only if they:
a. have previously held a job. b. are actively seeking employment. c. are willing to accept a reasonable offer. d. are between 16 and 65 years of age. e. are willing to accept any offer of employment.
When disposable income is 2000, C is
A. 2000.
B. 2200.
C. 2400.
D. 2600.