econ 2020

What would you say are the three most difficult challenges that the U.S. Economy is facing today?

Unemployment A balanced Budget The deficit Trade imbalance Taxes Economic Stimulus Economic Growth

Which of the following is not one of the five fundamental questions?

What prices will be charged for goods and services?

If competitive industry Y is incurring substantial losses, output will:

contract as resources move away from industry Y.

An economic system:

is a particular set of institutional arrangements and a coordinating mechanism used to respond to the economizing problem.

Refer to the above table. For these data the law of increasing opportunity costs is reflected in the fact that:

larger and larger amounts of capital goods must be sacrificed to get additional units of consumer goods.

Given the above information and assuming trade occurs between the three states we can expect:

money to flow counterclockwise from Michigan to Texas to Washington.

If the supply and demand curves for a product both decrease, then equilibrium:

quantity must decline, but equilibrium price may rise, fall, or remain unchanged.

If we say that a price is too high to clear the market, we mean that:

quantity supplied exceeds quantity demanded.

A fundamental difference between the command system and the market system is that, in command systems:

the division of output is decided by central planning rather than by individuals operating freely through markets.

An inferior good is:

a good whose demand drops when people's incomes rise

Suppose that an economy is producing on its production possibilities curve, but is not producing quantities of each good where the marginal benefit equals the marginal cost for each good. This economy:

can improve its allocation by producing more of one good and less of the other.

If a competitive industry is neither expanding nor contracting, we would expect:

economic profits to be zero.