QUESTION 34

In a market economy,

A. resources are allocated by the private parties who own the resources.

B. resources are allocated by the various local, state, and federal planning committees and zoning commissions.

C. shortages never exist.

D. surpluses never exist.

E. both c) and d).

QUESTION 37

The Law of Supply states that price and

A. supply are positively related.

B. quantity supplied are positively related.

C. supply are negatively related.

D. quantity supplied are negatively related.

E. quantity demanded are negatively related.

QUESTION 39

The Law of Diminishing Returns states that, as additional units of a variable input are added to a given amount of a fixed input, increases in output will

A. increase.

B. decline.

C. stay the same.

D. accelerate.

E. become erratic.