How does the market mechanism answer the WHAT, HOW, and FOR WHOM questions?
What will be an ideal response?
The market mechanism answers the WHAT question through the indirect interactions of producers and consumers. Market prices and sales signal the desired output. Producers desire to maximize profits and look for the least-cost method of production. This answers the HOW question. The market distributes output to the highest bidder and in doing so answers the FOR WHOM question.
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If the federal government tries to make fiscal policy sustainable by decreasing expenditure on transfer programs such as Social Security, Medicare, and Medicaid, ________ will bear the burden of adjusting fiscal policy, and this will result in a
lower standard of living for those who bear the burden. A) high-income households B) individuals in the labor force C) middle class taxpayers D) the elderly and poor
Unexpectedly high inflation reduces unemployment in the short run, but as inflation expectations adjust the unemployment rate returns to its natural rate
a. True b. False Indicate whether the statement is true or false
Use your basic knowledge and your understanding of market structures to answer this question. Which of the following companies most closely approximates a homogeneous oligopolist in a highly concentrated industry?
A. Kellogg's. B. Pittsburgh Plate Glass. C. Ford Motor Company. D. Starbucks Coffee.
Calculate the APS.
