Economic rent serves
A) a descriptive function by making some wealthier than others, but serves no allocative function.
B) an allocative function by guiding available supplies to the most efficient use.
C) only to make the rich richer and the poor poorer.
D) no useful function in a modern economy.
Answer: B
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In a centrally planned economy, resources are allocated primarily in accordance with directives from government agencies.
Answer the following statement true (T) or false (F)
In common value auctions
a. Every bidder know the value of the object being sold b. Each bidder makes their own estimate of the value of the good c. All bidders know the estimates of the others d. The true value of the item differs across bidders
How does the government measure the economy's rate of unemployment?
If a farmer earns a larger profit than the "normal profit" by producing a special type of milk that becomes popular,
A. the farm's owners are likely to withdraw from the industry in order to retire early. B. the firm will continue to earn its "normal profits" far into the future. C. other farmers are likely to produce the same milk, pushing down the prevailing market price. D. other farmers are likely to produce the same milk, pushing up the prevailing market price.