From society's point of view, the economic function of profits is to:
A. direct resources in response to changes in the economy.
B. equalize incomes.
C. ensure that the rich get richer.
D. provide revenues to pay high wages.
Answer: A
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Which of the following statements is not correct?
a. If a firm discriminates by paying short workers less than tall workers, the firm may be able to compete in the market if the firm's customers also prefer taller workers to shorter workers. b. If the government passes regulations that prevent shorter workers from working in higher paying jobs, taller workers may continue to earn higher wages than shorter workers. c. Government regulation that prohibits discrimination is economically necessary because market forces support discrimination. d. Competitive markets will eliminate discrimination in wages over time unless customer preferences also reflect discrimination and/or government intervention promotes discrimination.
Suppose Emilio offers you $500 today or $X in 10 years. If the interest rate is 6 percent, then at what value of X would you be indifferent between the two options?
a. X = 809.33 b. X = 855.56 c. X = 895.42 d. X = 916.74
Foreign aid:
A. provided by developed countries to developing countries represents about 10 percent of the GDP of developed countries. B. is an important source of funding for investment in most developing countries. C. does not contribute much to domestic investment in most developing countries. D. is largely wasted in most developing countries because it comes with no strings attached.
Adverse selection is a situation in which one party to an economic transaction has less information than the other party
Indicate whether the statement is true or false