Which of the following best explains why making automobiles completely safe is not efficient?
a. After some level of safety is reached, making cars even safer will not be worth the additional cost.
b. Because human life is priceless, automobile safety generally doesn't matter.
c. The benefit from additional automobile safety will generally rise as automobiles are made safer, more than offsetting the opportunity cost involved.
d. Economic efficiency suggests that automobiles should be made as safe as humanly possible.
A
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A large airline calculates that the additional cost of a having a passenger on a flight to the Bahamas as the cost of a bag of peanuts and a soft drink, which totals $1.50, but the airline’s price is $600 for potential customers who want to buy vacant seats on the day of the flight. Which economic principle is this airline failing to utilize?
What will be an ideal response?
When marginal cost exceeds marginal revenue,
A. marginal profit < 0. B. the firm should increase output. C. marginal profit + marginal cost > marginal revenue. D. marginal cost < marginal revenue - marginal profit.
One way the consumer price index (CPI) differs from the GDP chain price index is that the CPI:
a. uses current year quantities of goods and services. b. includes separate market baskets of goods and services for both base and current years. c. includes only goods and services bought by typical urban consumers. d. is bias free.
The burden of a tax is placed entirely on the buyers of a good when the demand for the good is _____
a. perfectly inelastic b. perfectly elastic c. unit elastic d. relatively elastic