If Mr. Smith thinks the last dollar spent on shirts yields less satisfaction than the last dollar spent on cola, and Smith is a utility-maximizing consumer, he should:
a. decrease his spending on cola.
b. decrease his spending on cola and increase his spending on shirts.
c. increase his spending on shirts.
d. increase his spending on cola and decrease his spending on shirts.
d
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Most economists believe that an increase in the quantity of money results in
a. an increase in the demand for goods and services. b. lower unemployment in the short run. c. higher inflation in the long run. d. All of the above are correct.
By comparing the value of marginal product with the marginal cost per input, a firm can find the:
A. cost-maximizing quantity to hire. B. revenue-maximizing quantity to hire. C. output-maximizing quantity to hire. D. profit-maximizing quantity to hire.
A firm pays Pam $40 per hour to assemble personal computers. Each day, Pam can assemble 4 computers if she works 1 hour, 7 computers if she works 2 hours, 9 computers if she works 3 hours, and 10 computers if she works 4 hours. Pam cannot work more than 4 hours day. Each computer consists of a motherboard, a hard drive, a case, a monitor, a keyboard, and a mouse. The total cost of these parts is $600 per computer. What is the marginal cost of producing the computers that Pam can assemble during her 3rd hour of work?
A. $5,400 B. $1,240 C. $1,200 D. $5,520
A bowed Production Possibilities Curve (PPC) indicates
A. only 1 good is always being produced. B. changing technology. C. that the trade-off between the 2 goods is not constant. D. inefficient production.