Automobile manufacturers produce a range of automobiles such as sports utility vehicles, luxury sedans, pickup trucks, and compact cars. What fundamental economic question are they addressing by making this range of products?
A) How to produce goods that consumers want?
B) Why produce a variety of automobiles?
C) What to produce?
D) Who to produce automobiles for?
Answer: C
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A basic problem with the infant-industry argument is that
a. most industries need protection when they are mature, not when they are first established. b. the amount of the tariff is unlikely to have much impact on the success of an infant industry. c. political pressure will likely prevent the withdrawal of the tariff when the industry matures. d. domestic consumers will continue to buy the foreign products anyway, regardless of the tariff.
Suppose Amy has 100 efficiency units of labor, Bill has 50 efficiency units of labor, and Chris has 20 efficiency units of labor. Which of the following is true?
A. A firm will never hire Chris, regardless of wages. B. A firm will always hire Amy over Chris, regardless of wages. C. A firm will never hire Bill, regardless of wages. D. A firm will hire Amy if her wage is at least twice that of Bill's and at least five times that of Chris's. E. A firm will hire Amy if her wage is at most double that of Bill's and at most five times that of Chris's.
The problem of scarcity
A. has been “cooked up” by disenchanted anticapitalists. B. exists because resources are limited relative to wants. C. is solved by promoting economic growth. D. is caused by artificially high prices.
For the "Composite Commodity Theorem" to hold, all goods in the composite must:
a. have constant prices. b. have constant relative prices. c. be used in fixed proportions. d. be net complements.