In 18th century Europe, governments gave guilds legal authority to limit production of goods
This authority obstructed the market mechanism because the guild's actions prevented the forces of ________ from coordinating the self-interested decisions of producers and consumers.
A) demand and supply B) nature
C) opportunity cost D) absolute advantage
A
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Define the term normal good. How can a normal good be recognized from
(i) the Engel curve diagram, (ii) the income elasticity of demand, and (iii) the substitution and income effects of a price change?
If consumers' incomes increase and the demand for bus rides decreases
A) bus rides are a normal good. B) consumers are behaving irrationally. C) bus rides are an inferior good. D) none of the above.
The law of diminishing marginal utility guarantees that demand curves will have positive slopes.
Answer the following statement true (T) or false (F)
Other things equal, relatively poor countries tend to grow
a. slower than relatively rich countries; this is called the poverty trap. b. slower than relatively rich countries; this is called the fall-behind effect. c. faster than relatively rich countries; this is called the catch-up effect. d. faster than relatively rich countries; this is called the constant-returns-to-scale effect.