Refer to the scenario above. Which investment option will a risk-averse individual choose?
A) He will choose to invest in Option A.
B) He will choose to invest in Option B.
C) He will choose to invest in Option C.
D) He will be indifferent in investing in any of the three options.
C
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In the figure above, diminishing marginal utility is shown by
A) total utility curve A. B) total utility curve B. C) total utility curve C. D) all three curves.
When marginal cost is below average total cost,
a. total cost is falling b. average total cost is rising c. average total cost is falling d. average fixed cost is rising e. total variable cost is falling
________ efficiency occurs when the firm produces a rate of output at which marginal cost equals the marginal benefit that consumers derive from the good. ________ efficiency occurs when the firm produces at the minimum point on its long-run average-cost curve
a. Social; allocative b. Productive; accounting c. Allocative; productive d. Economic; allocative
Which of the following is an example of the monitoring problem?
A. Government fails to stop firms hiring child labor to produce goods. B. The managers of a firm maximize their own salaries to the detriment of maximizing profit for the owner of the firm. C. A firm does not take into account the air pollution caused by a coal factory when pricing its product. D. Two firms collude to set the market price, but the government cannot prove this conclusively.