Question

Match the following: Adam Smith David Ricardo John Maynard Keynes Choices: (2 are not used.) a. founder of modern market economics comparative advantage-argument for mutual benefits of international trade comparative advantage-emphasized job displacements of international trade founder of modern macroeconomics invented capitalism duo If a firm has trouble selling its good, it can lower price. increase demand. decrease supply. both a) and b) are correct. 6. People often pay too much for goods because they are not aware of which store has the most inexpensive prices. Which assumption of perfect competition does this violate? a. none b. homogeneous products c. large number of firms d. perfect knowledge 7. In one thinks in terms of marginal cost vs. marginal benefit, why should we not double the govenrment's expenditures on medical care? because it will increase the deficit, which will cause a recession. b. because equity is a foolish goal. c. because society at some point may value other public services more than additional medical care. d. because it would make selling private insurance unprofitable.

Answer 1

Answer 4.

2. Adam smith- founder of modern market economics

3. David Ricardo- comparative advantage argument for mutual benefits of international trade

4. John Maynard keynes -founder of modern macroeconomics

Reason- Adam smith is known as father of modern economics. Keynes is father of moder macroeconomics and Ricardo is famous for Ricardian theory.

Answer 5. D. Both a and b are correct

Reason- A firm can decrese the price or increase the demand by advertisement or discount etc. To increase the supply.

Answer 6. D. Perfect knowledge

Reason- Perfect competitive market has the assumption of perfect knowledge where both buyers and sellers have perfect knowledge about the product.

Answer 7. C. Because Society at some point may value

Other public services more than medical care

Reason- MC =MB condiion also tells us that as we keep on consumption more of a good the additional benefit falls and additional cost keeps on rising. So too much of medical care service is also not good for a society as people need other services also and the budget is limited.