Which of the following statements is true of market prices in a perfectly competitive market?
A) Market prices are determined by the government.
B) Market prices allow for efficient allocation of scarce resources.
C) Market prices are not stable and fluctuate widely.
D) Market prices do not act as incentives for buyers.
B
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Should I buy a new or a used copy of the textbook? According to the economic way of thinking, the person is asking about
A) economic efficiency. B) educational efficiency. C) scholastic efficiency. D) motivational efficiency. E) academic efficiency.
Assume that one day's labor in England can produce either 20 units of cloth or 2 units of wine, while in Portugal, one day's labor can produce either 24 units of cloth or 12 units of wine. If England transfers 2 units of labor from wine to cloth and Portugal transfers 1 unit of labor from cloth to wine, the increase in combined output by those two workers will be
a. 16 wine, 8 cloth b. 16 wine, 16 cloth c. 12 wine, 12 cloth d. 8 wine, 16 cloth