In the circular flow model
A) households buy goods and services while firms sell goods and services. Firms obtain labor from households, capital from government, and raw materials from firms.
B) households demand goods and services which are supplied by firms, and the firms demand resources that are supplied by intermediate firms.
C) households buy goods and services and firms supply goods. Resources are supplied by other firms.
D) households demand goods and services that are supplied by firms, while supplying resources that are demanded by firms.
D
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Efficient production of a public good requires:
a. that individuals pay for such goods according to benefits received. b. that each individual's MRS be equal to the RPT of public goods for private goods. c. that the sum of individuals' MRSs be equal to the RPT of public goods for private goods. d. that governments produce at the low point of the average cost curve for the public good.
The opportunity cost of holding cash in your wallet
A. tends to increase as interest rates decrease. B. is the foregone interest that could have been earned on other assets. C. is zero. D. None of the choices are correct.