When economists refer to people making decisions at the margin, they mean that we compare ________ benefits with ________ costs
A) total; total
B) total; incremental
C) additional; additional
D) additional; marginal
Answer: C
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According to Okun's Law, when the natural employment rate is 6 percent and potential GDP is $10 trillion, then when actual employment is 5 percent, real GDP is
A) $10.1 trillion. B) $9.9 trillion. C) $9.8 trillion. D) $10.2 trillion. E) $8 trillion.
Decision making on the margin involves
A) comparing the marginal cost and marginal benefits when making a decision. B) comparing the total cost and the total benefit when making a decision. C) eliminating the additional cost when making a decision. D) determining the total benefits of a decision. E) comparing the benefits from the social interest to the benefits from the person's self-interest.
Which of the following is most likely to be a variable cost for an airline?
A. Insurance B. Property taxes C. Jet fuel D. The lease payment on the building where the airline’s headquarters are located.
In a model with money neutrality, how much should the money supply be increased to obtain a 1% increase in real output?
A) -1% B) between 0 and 1% C) 1% D) It cannot be done.