Three basic decisions must be made by all economies. What are they?
a. how much will be produced, when it will be produced, and how much it will cost
b. what the price of each good will be, who will produce each good, and who will consume each good
c. what will be produced, how goods will be produced, and for whom goods will be produced
d. how the opportunity cost principle will be applied, if and how the law of comparative advantage will be utilized, and whether the production possibilities constraint will apply
C
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In monopolistic competition, free entry and free exit mean that in the long run firms in the industry make zero economic profit
Indicate whether the statement is true or false
Everything else held constant, if the tax-exempt status of municipal bonds were eliminated, then
A) the interest rates on municipal bonds would still be less than the interest rate on Treasury bonds. B) the interest rate on municipal bonds would equal the rate on Treasury bonds. C) the interest rate on municipal bonds would exceed the rate on Treasury bonds. D) the interest rates on municipal, Treasury, and corporate bonds would all increase.