According to the optimal output rule, if marginal benefit:
a. exceeds marginal cost, an activity should be reduced.
b. is less than marginal cost, an activity should be reduced.
c. is equal to marginal cost, an activity should be reduced.
d. exceeds marginal cost, net benefit is maximized.
b. is less than marginal cost, an activity should be reduced.
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Suppose a positive technological change in the production of disease-resistant corn caused the price of corn to fall. Holding everything else constant, how would this affect the market for wheat (a substitute for corn)?
A) The demand for wheat would decrease and the equilibrium price of wheat would decrease. B) The supply of wheat would increase and the equilibrium price of wheat would decrease. C) The demand for wheat would increase because consumers could afford to buy more wheat and corn. D) The demand for wheat would decrease and the equilibrium price of wheat would increase.
Consumption, as a component of GDP:
A. measures spending on goods and services by individuals and households. B. includes nondurable goods only. C. includes durable goods only. D. measures spending only on goods, not services, by private individuals and households.
A nation's balance of payments can be affected by
A. the country's inflation rate relative to other nations' inflation rates. B. per capita GDP relative to other nations' per capita GDP. C. the country's population increases relative to other nations' populations. D. none of these.
A bond is a
A. Ownership share in a private company. B. License to use the Fed's discount window. C. Certification that a bank has met the Fed's reserve requirement. D. Promise to repay borrowed funds.