The price system allocates resources efficiently EXCEPT when
A) consumers decide they want more of a good.
B) resources are utilized to produce the highest-valued goods and services.
C) voluntary exchange exists.
D) the production of a good affects parties other than its buyers and sellers.
D
You might also like to view...
During the mid-2000s, the average price of a used car fell by nearly $500 and the quantity sold nation-wide decreased by several thousand each year. This set of results is a contradiction of the law of demand
Indicate whether the statement is true or false
There are two closely related crops, X and Y, with the following demand functions QX = 180 - 2PX + PY and QY = 150 + PX - PY where QX is the quantity of X, PX is the price of X, QY is the quantity of Y, and PY is the price of Y
These two crops are grown in two widely separated countries so there is no interrelationship between the supply curves. The short-run perfectly inelastic supply for X is 200 while the short-run perfectly inelastic supply for Y is 100. In equilibrium, the prices are A) PX = 30, PY = 80 B) PX = 40, PY = 60 C) PX = 60, PY = 120 D) PX = 80, PY = 130
Which of the following statements is TRUE about the long-run and short-run aggregate supply curve in the classical model?
A) The long-run aggregate supply curve is vertical, and the short-run curve is horizontal. B) The long-run aggregate supply curve is not defined, and the short run curve is vertical. C) The long-run and short-run curves start out horizontal and eventually become vertical. D) The long-run curve is vertical, and there is no short-run curve since all adjustments occur quickly.
Sugar is an input used to produce cereal. Suppose that the price of sugar rises. As a result
A) the supply curve for sugar will shift to the right. B) the supply curve for sugar will shift to the left. C) the supply curve for cereal will shift to the right. D) the supply curve for cereal will shift to the left.