In a simple circular flow diagram, who supplies factors of production in markets and who buys these factors of production? Who supplies goods and services in markets and who buys these goods and services?
What will be an ideal response?
Households supply factors of production and buy goods and services in markets. Firms buy factors of production and supply goods and services in markets.
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Under perfect competition the price of a depletable resource whose cost of extraction is not changing must rise at
a. the same rate as the increase in GDP. b. the same rate as the increase in consumer prices. c. the same rate as the rate of interest. d. a rate higher than the increase in the rate of interest.
A natural monopoly is a monopoly that arises from:
A. having an exclusive right to operate in a national park. B. a firm's natural desire to maximize its profit. C. having exclusive control over the natural resources used to produce a good. D. economies of scale.