Compare and contrast the institutions of a capitalist economy with those of a communist economy.
What will be an ideal response?
A capitalist economy is one in which the means of production are mostly owned and controlled by individuals. The allocation of resources and goods is governed by voluntary trade that takes place in markets. Capitalist economies are also characterized by transferable property rights. As a result, most economic decisions in a capitalist economy are decentralized. In contrast, the state tends to own the means of production in a communist economy. Further, many economic decisions are centralized, that is, they are made by government officials.
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Refer to the figure above. What is the revenue of the firm when it sells the profit-maximizing level of output?
A) $40 B) $160 C) $180 D) $240
The price of good A goes up. As a result, the demand for good B shifts to the left. From this we can infer that:
A) good A is used to produce good B. B) good B is used to produce good A. C) goods A and B are substitutes. D) goods A and B are complements. E) none of the above
Suppose a major computer virus struck the nation's computers and all hard drives were erased. What would happen in the labor market?
a. The real wage would increase and so would employment. b. The real wage would not change, but employment would decrease. c. The real wage would increase and employment would decrease. d. The real wage would decrease and so would employment. e. The real wage would decrease and employment would increase.
The ________ curve has a positive slope because as prices of final goods and services rise, prices of inputs rise more slowly
A) short-run aggregate supply B) long-run aggregate supply C) short-run aggregate demand D) long-run aggregate demand