Which of the following is one of the most important benefits of money in an economy?
A) Money allows for the accumulation of wealth.
B) Money makes exchange easier, leading to more specialization and higher productivity.
C) Money encourages self-sufficiency and therefore increases economic stability.
D) Money allows for the exchange of goods and services.
B
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If the risk associated with a particular outcome is ________, or the value of a particular outcome is ________, then cost-benefit analysis might lead people to take too few precautions
A) overestimated, overestimated B) overestimated; underestimated C) underestimated; overestimated D) underestimated; underestimated
If a firm in the long run produces less than its efficient scale, it
A) should raise its markup to increase its profit. B) should lower its markup to increase its profit. C) cannot be a perfectly competitive firm. D) should not advertise to increase its profit. E) must have its markup equal to zero.