The basic concern of economics is to:
A) keep business firms from losing money.
B) prove that capitalism is better than socialism.
C) study the choices people make.
D) use unlimited resources to produce goods and services to satisfy limited wants.
Ans: C) study the choices people make.
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Assuming imperfect capital mobility and a fixed exchange rate, then an expansionary monetary policy
a. results in a balance of payments surplus without a conflict between domestic goals and external balance. b. results in a balance of payments deficit with a potential conflict between domestic goals and external balance. c. will shift the LM curve to the left. d. will have no effect on the balance of payments.
Perfectly competitive firms are price takers because
a. all small firms must take the price set by the largest firm in the market b. firms take the price that government determines is a "fair" price c. each firm is small and goods are perfect substitutes for one another d. free entry and exit in the short run creates a constant market price in the long run e. high barriers to entry force firms to compete by charging lower prices than other firms in the industry