Market economies are based on private enterprise, which means
a. there is no private property.
b. private companies control the government.
c. economic decision-making happens through markets.
d. all property is private.
Answer: c. economic decision-making happens through markets.
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Which of the following is an example of a person or firm that is most likely to have been granted a public franchise?
A) medical doctor B) taxi cab driver C) the local pizza parlor D) the local telephone company E) the local Honda dealership
Suppose 100 citizens each derive marginal benefit from submarines according to the function MB = 10 - Q. If subs cost $100 each to produce, what is the efficient quantity of submarines?
What will be an ideal response?
The OLS estimators of the coefficients in multiple regression will have omitted variable bias
A) only if an omitted determinant of Yi is a continuous variable. B) if an omitted variable is correlated with at least one of the regressors, even though it is not a determinant of the dependent variable. C) only if the omitted variable is not normally distributed. D) if an omitted determinant of Yi is correlated with at least one of the regressors.
Public choice theory assumes that government makes optimal policies to respond to the shortcomings of private markets
a. True b. False