Economic efficiency is the primary guide in answering which of the fundamental questions in a market economy?
A. What will be produced?
B. How is the output to be produced?
C. How can the system accommodate change?
D. Who is to receive the output?
Answer: B
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Use the following table to answer the question below. Jane's Production Possibilities SchedulePounds of Green BeansPounds of Corn08020604040602080 0Jane's opportunity cost of producing 1 pound of green beans is ________ pound(s) of corn.
A. 4 B. 1/2 C. 1 D. 2
The table below shows the utility schedule for a consumer of candy bars. Candy Bars ConsumedTotal Utility001529312414515615713Marginal utility becomes negative with the consumption of the
A. sixth candy bar. B. seventh candy bar. C. fifth candy bar. D. second candy bar.
Technological improvements in coal mining will
A) increase the price of coal. B) decrease the price of coal. C) increase the interest rate. D) decrease the interest rate.
If an agent is risk neutral and a principal is risk averse, which of the following contracts would be efficient in risk bearing?
A) A fixed fee is paid to the agent. B) A fixed fee is paid to the principal. C) An hourly rate is paid to the agent. D) The agent enjoys a share of the profit.