Which of the following statements is false?
A) Anytime you have to decide which action to take you are facing an economic trade-off.
B) Trade-offs do not apply when the consumers purchase a product for which there is excess supply, such as a stock clearance sale.
C) Every individual, no matter how rich or poor, is faced with making trade-offs.
D) Economics is a social science that studies the trade-offs we are forced to make because of scarcity.
Answer: B
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To maintain a fixed exchange rate via intervention in the markets, a government should:
a. be ready to crack down on illegal traders. b. be ready to buy the home currency with foreign currency reserves when the home currency's value declines. c. be ready to sell the home currency when the home currency's value declines. d. be ready to borrow funds from international banks when the home currency's value declines.
Product differentiation helps determine the slope of the demand curve facing a firm in monopolistic competition
a. True b. False