Prices direct economic activity in a market economy by
a. influencing the actions of buyers and sellers.
b. reducing scarcity of the goods and services produced.
c. eliminating the need for government intervention.
d. allocating goods and services in the most equitable way.
A
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If average fixed cost exceeds average variable cost at a particular level of output: a. Profits must be negative
b. That fact is meaningless for deciding the quantity of output to produce. c. Output levels are probably quite low relative to the designed capacity of the production facility. d. Both b and c. are likely true.
The real interest rate is:
A. the everyday notion of the interest rate. B. adjusted for inflation. C. the amount of interest the bank pays you for saving or charges you for borrowing. D. the actual average interest rate in the economy.