Question

Economists believe that:

Question 4 options:

	a) making information available to market participants improves market function.
	b) data is more important to traders than information.
	c) information should be sold to the highest bidder.
	d) the flow of information has minimal impact on market efficiency.

Question 5 (14 points)

When the individuals who get a good or service are the ones who desire that product the most, the economy is experiencing:

Question 5 options:

	a) allocative efficiency.
	b) equity.
	c) production efficiency.
	d) deflation.

Question 6 (1 point)

(Figure: Tanks and Health Care) At point f, in order to produce more tanks, society must give up a certain amount of health care services.
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Question 6 options:

	a) False
	b) True

Question 7 (1 point)

Increasing opportunity costs occur along the production possibilities frontier because:

Question 7 options:

	a) resources lack specialization.
	b) of inequities in the distribution of income.
	c) of unemployment in the economy.
	d) not all resources are equally well suited to produce all goods.

Answer 1

4. a. making information available to market participants improves market function
(According to economists, information improves functioning of the market.)

5. a. allocative efficiency
(When production is for the individuals who desire the product the most then it is called allocative efficiency.)

6. a. False
(Production of tanks can be increased to point b without giving up any health care services.)

7. d. not all resources are equally well suited to produce all goods
(Opportunity costs are increasing because all resources are not equally suited to produce all goods.)