N 260 32. Which of the following statements does NOT apply to a market economy?
ID: 1119425 • Letter: N
Question
N 260 32. Which of the following statements does NOT apply to a market economy? a. Firms decide whom to hire and what to produce. . Households decide which firms to work for and what to buy with their incomes Prices act as a "visible hand" to direct economic activities in allocating scarce resources . Prices act as an "invisible hand" to direct economic activities in allocating scarce resources 33. In economics, thee s used to illustrate the principle that people face tradeoff's and associated with opportunity costs. As you have experienced, coming to college is not a free lunch, what is the opportunity cost of going to college? a. the cost that the parents pay for their children to attend the college. b. the value of the best opportunity that a student gives up to attend college such as working. c. the total spent on food, clothing, books, transportation, tuition, lodging, and other expenses d. zero, since a college education will allow a student to earn a larger income after graduation. 34. In the simple circular-flow diagram, the participants in the economy are households and firms. In the circular-flow diagram, which of the following items flows from firms to households through the markets of factors of production? a. factors of production such as land, labor, or capital. c. dollars spent on goods and services. b. dollars paid to land, labor, and capital. d. goods and services. 35. The use of theor conducting a control experiment in an economic system data from historical episodes of economic change. Which a. For economists, y and observation is more difficult in economics than in sciences such as physics due to the difficulty in economic models provide insights about the world. b. Economic models are built without assumptions. economist evaluates a positive statement, he or she is primarily examining evidence. Thus, which of the following is an m is not easy to conduct. Thus, to refute their theories, economists often gather easy toc h of these statements about economic models is NOT correct? Economic models are often composed of equations and diagrams. d. All of the above are correct. example of a positive, as opposed to normative, statement? a. When the quantity b. Income tax c. The quantity of money has grown too slowly in recent years. d. All of the above are positive statements of money grows rapidly, inflation is a predictable consequence. rates should not have been cut as they were a few years ago. 37. Suppose the United States has a comparative advantage over Mexico in producing cars. The principle of comparative advantage asserts that the United States should produce a moderate quantity of cars and import the remainder of what it requires from Mexiceo. the United States should refrain altogether from producing cars and import all of what it requires from Mexico. United States should produce more cars than what it requires and export some of it to Mexico d. Mexico has nothing to gain from importing United States cars. Table#1Explanation / Answer
32.c.
Prices act as a "visible hands" to direct economic activities in allocating scarce resouces- does not apply to a market economy. Price act as "invisible hand" and signals the point where buyers and sellers interest meet.
33.b.
The opportunity cost of going to college is the value of the best opportunity that a student gives up to attend college such as working. The opportunity cost is the benefit that the person could be recieved but give up to get another benefit.
34.b.
The dollars paid to land labor and capital as rent, wages, interest respectively flows from firms to households through the markets of facrors of production.
35.b.
Economic models are built without assumption is not correct. Because every economic model is based on certain set of assumption on which the model (consisting of certain parameters, formula and diagram) is constructed. With the changes of assumption the model also changes accordingly.
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