Activities designed to convert resources into goods and services is known as
A) supply.
B) consumption.
C) production.
D) scarcity.
C
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If the equilibrium price of bread is $2 and the government imposes a $1.50 price ceiling on the price of bread, then:
a. more bread will be produced. b. there will be a shortage of bread. c. the demand for bread will decrease. d. producers will charge $0.50 for bread. e. $0.50 in tax revenue will be paid for each unit of bread.
At the end of the year, Ford realizes it has overproduced Fiestas, because 2,500 of them are left unsold. How is this accounted for in that year's GDP? The cars are:
A. considered inventory and their value will increase investment. B. considered durable goods, and their value will increase consumption. C. not counted until they are sold in next year's GDP. D. considered a bad thing and reduce the value of investment.
For dessert, Mac has the choice between cheesecake and apple pie. The cheesecake has a marginal utility of 50 and a price of $5, and the apple pie has a marginal utility of 30 and a price of $3 . Therefore, Mac should buy
a. the cheesecake since the marginal utility is greater b. the apple pie because its price is lower c. two servings of apple pie and no cheesecake d. four servings of cheesecake e. either the apple pie or the cheesecake, it makes no difference
Even-handed enforcement of contracts fuels economic prosperity because it
A) increases market uncertainty and the probability of contract violations. B) promotes gains from trade by keeping transaction costs low. C) increases transaction costs. D) permits individuals to invade or infringe on the property rights of others.