Which of the following correctly explains the role of the government in a free market?
A) The government acts as a referee by enforcing contracts and preventing stealing.
B) The government sets prices according to the relative value of each good.
C) The government allocates goods to those buyers who value the goods the most.
D) The government sets production quotas for sellers in the market.
A
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What is the difference between goods and services?
What will be an ideal response?
Private saving is defined as
A) private disposable income minus consumption. B) net national product minus consumption. C) private disposable income minus consumption plus interest. D) private disposable income minus consumption plus interest plus transfer payments.
Which of the following is a definition of the consumption function?
a. A functional relationship between real consumption spending and real disposable income b. A functional relationship between real consumption spending and the interest rate c. A functional relationship between real consumption spending and wealth d. A functional relationship between real consumption spending and total spending e. A functional relationship between real consumption spending and net taxes
The maximin criterion can be defined as which of the following?
a. One seeks the maximum of the minimum payoffs to the various available strategies. b. One seeks the minimum of the maximum losses among the various available strategies. c. One seeks the maximum of the minimum losses to the various available strategies. d. One seeks the maximum of the maximum gains of the various available strategies.