The economizing problem for society is:
a. That product prices rise more rapidly than incomes of consumers
b. To establish prices which are fair for both producers and consumers
c. To achieve a more equitable distribution of income in society
d. That productive resources are scarce relative to economic wants
Answer: d. That productive resources are scarce relative to economic wants
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What is the cost-minimizing equilibrium condition?
What will be an ideal response?
If people can be prevented from using a certain good, then that good is called
a. rival in consumption. b. excludable. c. a common resource. d. a public good.
If the price of Italian shoes imported into the United States increases, then
a. both the GDP deflator and the consumer price index will increase. b. neither the GDP deflator nor the consumer price index will increase. c. the GDP deflator will increase, but the consumer price index will not increase. d. the consumer price index will increase, but the GDP deflator will not increase.
Suppose Paul has chosen a combination of two goods, A and B, such that the marginal utility per dollar spent for good A (MUA/PA) is .6 and the marginal utility per dollar spent for good B (MUB/PB) is 1. To increase utility with the same amount of money, Paul should:
A. increase the number of B consumed and decrease the number of A consumed. B. increase the number of both A and B consumed. C. increase the number of A consumed and decrease the number of B consumed. D. do nothing; he cannot increase total utility.