Markets can give a buyer everything a buyer needs to know about a product even though the buyer does not have the training to understand the specific knowledge needed to build or distribute the product. Explain.
What will be an ideal response?
The market price of a good tells the buyer of the good in a market the opportunity cost of purchasing the good. As long as the value of the good is greater than the price of the good, the buyer will make purchases. As a result, as long as the value of a good is higher than the costs of production, society will efficiently produce the good, maximizing social well-being.
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In long-run equilibrium, a competitive firm produces the level of output at which:
a. marginal cost is at a minimum. b. short-run average total cost and long-run average cost are at a minimum. c. total revenue is at a maximum. d. diseconomies of scale end.
Saving by households and businesses is called ________ saving.
A. national B. aggregate C. private D. public