One of the ugly stepsisters argues that she, rather than Cinderella, should go to the ball because she will derive more utility from it than Cinderella. An economist would:
a. agree, since the ugly stepsister's reasoning is sound
b. want to know how much utility each will receive from attending the ball in order to determine which woman should attend.
c. point out that making interpersonal utility comparisons is not possible.
d. ask how many balls each woman has attended in order to calculate the marginal utility that each would derive from attending, and then decide who should go to the ball.
c
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When accounting profits are positive, economic profits
A) must be positive. B) will be negative. C) will equal zero. D) could be positive, negative or zero.
When there is a positive externality associated with the watering of one's lawn, the free market results in:
a. not enough lawn watering. b. too much lawn watering. c. the socially optimal level of lawn watering. d. people watering each other's lawns. e. government subsidies for lawn watering.
A candle manufacturer produces 4,000 units when the market price is $11 per unit and produces 6,000 units when the market price is $13 per unit. Using the midpoint method, for this range of prices, the price elasticity of supply is about
a. 6. b. 2.4. c. 0.4. d. 0.67.
In-kind transfers include the direct transfer of
A. Goods and services rather than cash. B. Cash rather than goods. C. Education rather than housing. D. Cash rather than medical services.