Why do we have to pay a price for most of the goods we consume?
What will be an ideal response?
The inputs we use to produce most goods and services (for example, capital and labor) are scarce. Therefore almost all goods and services are scarce compared to the quantity that consumers want to consume. In other words, at a price of zero the demand for most goods is higher than the available supply; our wants are unlimited but our resources are not. Prices act as a rationing mechanism to prevent the overconsumption of such scarce goods, making them available in the quantity such thatthe supply of these goods matches the demand.
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Why did the slave-labor system probably cause a lag in Southern urban and industrial development?
(a) The slave system provided a weak market for goods because of the low income and consumption levels of slaves. (b) Side-effects of urbanization and industrialization, such as slave flight and greater freedom, were threatening to Southern owners. (c) The South's slave society culture was resistant to manufacturing and urbanization. (d) All of the above apply.
All of the following are true about a monopolist EXCEPT
A) the demand curve for its product is perfectly elastic. B) it produces a product with no close substitutes. C) its demand curve is the same as the market demand for the industry. D) it is a single seller of a good or service.
Which of the following is not a reason for the wage differential between females and males?
a. The choice of major in college by females tends to be different than the choice by males. b. The existence of employer prejudice leads to wage differential between males and females. c. The number of males is usually greater than the number of females in the labor force. d. Females bear the primary responsibility of childbearing. e. Women accept lower wages for flexible and shorter working hours.
The interest rate effect explains that higher prices
a. make it more expensive to borrow, leading to higher interest rates and less investment b. make people worse off by reducing the value of their wealth, leading them to save more and spend less c. decrease borrowing, leading to higher interest rates and less investment d. decrease borrowing, leading to lower interest rates and more investment e. increase borrowing, leading to higher interest rates and less investment