An economic system is
A) the universe of all resources.
B) a way to create new resources.
C) a mechanism to allocate scarce resources.
D) an organization that generates profits.
C
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Households receive their income in the circular flow diagram by
A) obtaining dividends and interest payments. B) selling the use of their property. C) selling resources they own to business firms. D) selling the goods they produce at home.
Is the following quote correct? "Here's the law of demand in a nutshell. The lower the price, the higher the quantity demanded, other things constant."
A) Yes, it is totally correct. B) No. It would be correct if it didn't say "other things constant." C) No, because it confuses demand and quantity demanded. D) No, because the law of demand does not apply to nutshells.