In a competitive market economy, a resource in short supply will be allocated
a. so that each firm gets enough to keep producing some portion of its output.
b. according to how much each firm purchased before the shortage.
c. to those firms that can make the most profitable use of it.
d. by government regulation.
C
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DeShawn has spent $600 purchasing and repairing an old fishing boat, which he expects to sell for $900 once the repairs are complete. DeShawn discovers that, in addition to the $600 he has already spent, he needs to make an additional repair, which will cost another $400, in order to make the boat worth $900 to potential buyers. He can sell the boat as it is now for $400 . What should he do?
a. He should sell the boat as it is now for $400. b. He should keep the boat since it would not be rational to spend $1,000 on repairs and then sell the boat for $900. c. He should complete the repairs and sell the boat for $900. d. It does not matter which action he takes; the outcome is the same either way.
Briefly describe how labor unions can affect wages in non-unionized industries