As methods of economic organization, the market and the public sector are similar in which of the following ways?
a. Income and power are distributed equally in both sectors.
b. In both sectors, economic activity is undertaken only when it satisfies the criterion for economic efficiency.
c. In both sectors, economic exchange is completely voluntary.
d. Someone must cover the cost associated with the provision of scarce goods in both sectors.
D
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The part of corporate profits that is paid to the shareholders of a corporation is
A) retained earnings. B) shareholders. C) dividends. D) business revenue.
Refer to the above figure. What price-output combination would apply under perfect competition?
A) P4 and Q1 B) P3 and Q2 C) P2 and Q3 D) P1 and Q1
In Gelate, Pennsylvania, the market for compact discs has evolved as follows. There are two firms that each use a marquee to post the price they charge for compact discs. Each firm buys CDs from the same supplier at a cost of $5.00 per disc. The inverse market demand in their area is given by P=10-2Q=, where Q is the total output produced by the two firms.
a) Solve for the Bertrand equilibrium price and market output. b) Would your answer differ if the products were not perfect substitutes? Explain.
If the economy is in recession, explain what advice you would give the President, if you were a monetarist economist. What if you were a Keynesian?
What will be an ideal response?