Which of the following statements is correct?
A. The operation of a market system eventually results in an equal distribution of income
B. Producers are "sovereign" in a market economy because they determine what is produced
C. The market system is efficient at allocating resources, but not at allocating products
D. Freedom of choice and enterprise are essential elements of the market system
Answer: D
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Refer to the figure above. Which of the following methods is the best to compensate the losers from opening Lithasia to international trade?
A) Sellers in Lithasia could be taxed and the revenue could be used to compensate buyers. B) Buyers in Lithasia could be taxed and the revenue could be used to compensate sellers. C) Both buyers and sellers could be taxed and the revenue could be retained by the government. D) The sellers in Lithasia could sell the pens at a price above the equilibrium price in the domestic market.
Refer to the table above. If the price of a chair decreases to $5 and the rental price of machines is $50 per day, up to how many machines should the firm rent?
A) 2 B) 3 C) 5 D) 7
Mercantilism
A) is the philosophy of free international trade. B) was a system of export promotion and barriers to imports practiced by governments, especially in the 17th and 18th centuries. C) was praised by Adam Smith in The Wealth of Nations. D) Both A and C.
As of 2010, the Gini coefficient was 33.9 in India and 40.8 in the United States. We can interpret this to mean that inequality:
A. is greater in India than the United States. B. is greater in the United States than in India. C. is about the same in the two countries. D. is not a problem in either country.