Markets are extraordinarily useful and flexible institutions through which society can allocate its scarce resources. However:
a. a true democracy has no place for market-driven events.
b. this only holds true when people act rationally.
c. there is no useful role for government in this system.
d. markets may sometimes produce unwanted results.
d. markets may sometimes produce unwanted results.
Markets are extraordinarily useful and flexible institutions through which society can allocate its scarce resources. However, markets may sometimes produce unwanted results. A short list of the cases in which markets produce unwanted results includes monopoly and other cases of imperfect competition, pollution, poverty and inequality of incomes, discrimination, and failure to provide insurance.
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The economy is in a recession. The government enacts a policy to increase purchases by $2 billion. The MPC is 0.8. What would be the full increase in real GDP from the change in government purchases at a given price level?
A. $16 billion B. $10 billion C. $6 billion D. $8 billion
Which of the following is a form of outsourcing?
A) changing your own oil B) washing your clothes C) getting your fruits and vegetables from the farmers' market D) studying for your economics exam
For which type of organization is unlimited liability likely to be the greater problem-proprietorships or partnerships? Why?
What will be an ideal response?
When prices drop in response to a decline in demand for an increasing cost industry:
a. producer surplus will increase but rents may decrease. b. rent earned by elastically supplied inputs will decline by more than rent earned by inelastically supplied inputs. c. rent earned by elastically supplied inputs will decline by less than rent earned by inelastically supplied inputs. d. both producer surplus and rents will increase.