The price rationing mechanism of a freely functioning market leads to the most efficient use of ...

The price rationing mechanism of a freely functioning market leads to the most efficient use of resources because
 
  A) all gains from mutually beneficial trade are captured.
  B) the Federal Trade Commission regulates the market.
  C) of the rise of the legislative apparatus that supports trade.
  D) the Justice Department monitors market activities.

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Ques. 2

When determining the production possibilities curve
 
  A) the trade-off between the goods in the economy remains constant.
  B) the amount of productive resources remains constant.
  C) the prices of the goods are used.
  D) the prices of resources are used.

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Ques. 3

The modification of manufacturing processes so as to reduce the resulting environmental damage is an endeavor that requires capital investment, labor inputs, and technology. What then follows from this statement?
 
  A) Economic growth can benefit the environment.
  B) Environmental damage is a regrettable but necessary side effect of economic growth.
  C) The condition of the environment will be better in slower-growing countries.
  D) The way to reduce pollution is to educate people about its effects.

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Ques. 4

In building a model to analyze economic situations, one of the important assumptions is
 
  A) ceteris paribus.
  B) scarcity.
  C) conversion abstraction.
  D) cognitive dissonance.

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Ques. 5

Mary increases her consumption of Good X after the price of Good Y decreased. For Mary
 
  A) Good X and Good Y are substitutes.
  B) Good X and Good Y are complements.
  C) Good X is an inferior good.
  D) Good Y is an inferior good.

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Ques. 6

Country X has experienced GDP growth of 4 percent and a population growth of 5 percent. What is this country's growth of per capita real GDP?
 
  A) -1 percent
  B) 1 percent
  C) 9 percent
  D) -9 percent

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Ques. 7

State sales taxes are operated as a system of
 
  A) ad valorem taxation.
  B) unit taxation.
  C) income taxation.
  D) revenue minimizing taxation.

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Ques. 8

The economic role of the legal system might best be described as
 
  A) promoting the productive efficiency of competitive markets.
  B) identifying and producing public goods.
  C) establishing the rules of the game and acting as a referee when disputes arise among market participants.
  D) identifying and producing merit goods.