Answer the following questions true (T) or false (F)
1. When voluntary exchange takes place, neither party gains from the exchange.
2. A college must decide if it wants to offer more adult literacy classes. This decision involves answering the economic question of "what to produce."
3. In a centrally planned economy, the households and firms decide how economic resources will be allocated.
Answer:
1. False.
2. True.
3. False.
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The President's budget is presented to Congress: a. in the form of the Economic Report of the President
b. in a report followed shortly by the Economic Report of the President. c. at the beginning of the fiscal year. d. in a report that should be voted up or down within 60 days. e. in a report that requires a two-thirds vote for ratification.
Subsidies are most likely to:
A. leave total economic surplus unchanged, but transfer surplus from producers to consumers. B. reduce total economic surplus. C. increase total economic surplus. D. reduce consumer surplus.