The scarcity problem
A. has been solved in all industrialized nations.
B. persists only because countries have failed to achieve continuous full employment.
C. has been eliminated in affluent societies such as the United States and Canada.
D. persists because economic wants exceed available productive resources.
Answer: D
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Suppose the market-clearing wage for pizza delivery workers is $7.00 per hour, but a $10.00 per hour minimum wage is enacted. Other things constant, the higher minimum wage tends to
A) increase the supply of pizza delivery workers. B) decrease the quantity demanded of pizza delivery workers. C) create a shortage of pizza delivery workers. D) accomplish all of the above. E) accomplish none of the above.
Refer to the table above. Country A has a comparative advantage in
A) beer. B) wine. C) both beer and wine. D) neither beer nor wine.
Most economists agree that the best rate of inflation for a stable economy would be around:
A. zero. B. two to three percent. C. five to six percent. D. seven percent.
Resolving Adam Smith's diamond-water puzzle involves
a. realizing that price is not directly related to total utility. b. knowing that at optimal purchase, price will tend to equal marginal utility. c. knowing that, as increasing quantities of a good are consumed, marginal utility diminishes and, conversely, consuming a small quantity of a good produces high marginal utility. d. All of the above are correct.