Economic theory looks at social coordination as a process of
A) continuing mutual adjustments to the situations created by the actions of others.
B) continuous adjustment of extremes to conform to the average.
C) passing information up from below and instructions or commands down from above.
D) sacrificing personal interest to the public or general interest.
E) sacrificing the public interest to self-interest.
Ans: A) continuing mutual adjustments to the situations created by the actions of others.
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By using only the aggregate demand curve, we can determine
A) only the price level. B) only the quantity of real GDP. C) both the price level and quantity of real GDP. D) neither the price level nor the quantity of real GDP.
Suppose a firm has market power and faces a downward sloping demand curve for its product, and its marginal cost curve is upward sloping. If the firm reduces its price, then:
A) consumer and producer surplus must increase. B) consumer surplus increases, producer surplus may increase or decrease. C) consumer surplus increases, producer surplus must decline. D) consumer and producer surplus must decline.
Which of the following applies to a real-world socialistic economy?
A. private ownership of all factors of production B. government ownership of all factors of production C. government ownership of most of the factors of production D. lack of central planning
Which of the following statements about the underground economy is true?
A) The underground economy in developing countries amounts to less than 10% of measured GDP. B) Most transactions that occur in the underground economy are included in the calculation of GDP. C) Excluding underground economy production from measured GDP causes errors in GDP growth estimates in the long run. D) Income that is earned but not reported as income for tax purposes is included in the calculation of GDP.