The concept of "the invisible hand" suggests that to attain efficiency, the government should
A) guide economic activity.
B) set prices.
C) leave prices and output decisions to the competitive market.
D) regulate all production decisions, but not price decisions.
E) make sure that a command system is used to allocate resources.
C
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According to the concept of scarcity in economics,
(a) wants will be fully satisfied sometime in the future. (b) the wants of society cannot be satisfied by the goods and services that can be produced from given resources. (c) there are no free goods. (d) free goods and scarce goods are equally available. (e) All of the above.
The price of dishwashers increases dramatically, causing a 1 percent increase in the CPI. The price increase will most likely cause the GDP deflator to increase by
a. more than 1 percent. b. less than 1 percent. c. 1 percent. d. None of the above is correct; this particular price increase will not affect the GDP deflator.
You are the Minister of Trade for a small island country with the following annual PPC:
You are negotiating a trade agreement with a neighboring island with the following annual PPC: 
Both islands specialize exclusively in the product for which they have a comparative advantage. You have agreed to give 350 coconuts to the other island in exchange for 1,300 fish. After the trade the other island has a total of ________ coconuts and ________ fish.
A. 350; 1,200 B. 500; 1,200 C. 350; 1,500 D. 850; 1,200
Figure 9.2 represents the market for used cameras. Suppose buyers are willing to pay $125 for a plum (high-quality) used camera and $25 for a lemon (low-quality) used camera. Initially buyers believe that 50% of used cameras in the market are lemons (low quality). Compared to the outcome with neutral expectations, how many fewer cameras are sold in equilibrium?
A. 10 B. 15 C. 20 D. 25