Which of the following is not a problem for the price system allocating resources among different time periods?
a. Interest rates are used for a variety of purposes other than influencing investment.
b. The market devotes too much to immediate consumption.
c. Our market system leads to lesser real incomes for later generations.
d. Our market system despoils irreplaceable natural resources.
c
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A perfectly competitive firm's marginal cost exceeds its marginal revenue at its current output. To increase its profit, the firm will
A) lower its price. B) raise its price. C) decrease its output. D) increase its output.
Suppose a patent applicant approaches an insurance company and seeks to purchase an insurance policy that her patent will not net $1m in the next three years. The insurance company
A) will sell her an insurance policy because the proposal entails uncertainty not risk. B) will sell her an insurance policy because the proposal entails risk not uncertainty. C) will not sell her an insurance policy because the proposal entails uncertainty not risk. D) will not sell her an insurance policy because the proposal entails risk not uncertainty.