A market equilibrium occurs
A) only with government regulation.
B) only because of the profit motive of firms.
C) only because of the complacency of consumers.
D) through the interaction of self-interested consumers and producers.
D
You might also like to view...
When consumers cannot tell the difference at the time of sale between high-quality products and those with defects, strong sales of the low-quality products will tend to depress price and drive the high-quality products from the market. Economists call this
a. the curse of advertising. b. the imperfect information problem. c. the brand name problem. d. an open-access resource.
Alfonso has noticed that increases in unemployment insurance claims are associated with recessions, and therefore he advocates limits on unemployment insurance so as to prevent recessions. Mary has noticed that most drug addicts once attended schools, and therefore she advocates getting rid of schools so as to prevent drug addiction
a. The reasoning of both Alfonso and Mary suffers from the omitted variable problem. b. The reasoning of both Alfonso and Mary suffers from the reverse causality problem. c. Alfonso's reasoning suffers from the reverse causality problem, and Mary's reasoning suffers from the omitted variable problem. d. Mary's reasoning suffers from the reverse causality problem, and Alfonso's reasoning suffers from the omitted variable problem.
Why is the demand for one good elastic, but for another inelastic?
What will be an ideal response?
Using Figure 1.7, we know the production of 5 units of soda and 2 units of pizza is 
A. impossible because we have the resources but do not have the technology. B. impossible because we have the technology but do not have the resources. C. possible, but there would be unemployed resources. D. possible, but only if all resources were fully employed.