Which of the following is a distinguishing feature of laissez-faire capitalism?
A. Public ownership of all capital.
B. Central planning.
C. Minimal government intervention.
D. A circular flow of goods, resources, and money.
Answer: C
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Perfectly inelastic demand curves are vertical.
Answer the following statement true (T) or false (F)
Some competitive firms are willing to operate at a loss, in the short run, because:
a. their average variable cost is less than the price. b. their fixed costs are less than their current losses. c. their average total cost is less than the price. d. they do not attempt to maximize profits or minimize losses. e. their revenues are at least able to cover their fixed costs.
If government undertakes to reduce water usage by using a market incentive plan:
A. consumers will be asked to reduce water usage voluntarily. B. consumers who reduce water usage by more than the required amount can sell marketable certificates to consumers who seek to reduce usage by less than the required amount. C. each consumer will have to reduce his or her water usage by an equal amount. D. consumers who do not reduce usage by the required amount will have to pay taxes on the extra water usage.
When people make choices that (at the time and with the information they have at their disposal) give them the greatest amount of satisfaction, they are said to be:
a. behaving irrationally. b. applying econometric models to their everyday behavior. c. living under a communist dictator. d. acting in their own self-interest. e. showing no willingness to plan for the future.