What is the economic problem? How does a command economy solve the economic problem?
What will be an ideal response?
The economic problem is that given scarce resources, how exactly do large, complex societies go about answering the basic economic questions? A command economy answers the questions through some centralized authority making decisions about what to produce, how to produce it, and how to distribute it.
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Refer to Table 2-18. Which of the following statements is true?
A) Mickey has a comparative advantage in making both products. B) Minnie has a comparative advantage in making both products. C) Minnie has a comparative advantage in making hats and Mickey in making umbrellas. D) Mickey has a comparative advantage in making hats and Minnie in making umbrellas.
According to the text, "economics tempers the enthusiasm of a manager to focus on the customer" because
A) customers hardly know what they want. B) focusing solely on the customer may ignore other important elements of business success. C) it shows the manager that the greatest benefit to the firm is to sell more. D) it enables the manager to see that any kind of customer focus is not worth the costs. E) it ensures that managers will find equilibrium.