Suppose an exhaustible resource can be sold only this period or next period. The resource owner is considering selling 100 tons of the resource this period. The future value of the resource when 100 tons are sold this period is less than the present value of the 100 tons sold this period multiplied by one plus the interest rate. What should the resource owner do?
A) She should sell more than 100 tons this period.
B) She should sell only 100 tons this period.
C) She should sell less than 100 tons this period.
D) She should not sell any of the resource in either period.
A
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The principle that individuals and firms pick the activity level where the incremental benefit of that activity equals the incremental cost of that activity is known as the
A) spillover principle. B) principle of diminishing returns. C) principle of opportunity cost. D) marginal principle.
The long-run aggregate supply curve is
A) horizontal at the full-employment level of real Gross Domestic Product (GDP). B) vertical at the full-employment level of real Gross Domestic Product (GDP). C) sloping upward due to the effects of price level changes on real Gross Domestic Product (GDP). D) the same as the short run aggregate supply (SRAS) curve.
Which of the following statements is correct?
a. The "law" of diminishing marginal utility implies that demand curves slope upward and to the right. b. If the price of a good falls, the utility-maximizing consumer will assure that marginal utility rises. c. If the price of a good falls, the consumer will purchase more of the good in order to maximize total utility. d. MU and demand have different underlying consumer behavior assumptions.
Which of the following is correct?
a. In the U.S. the natural rate of unemployment is frequently near 2%. b. The natural rate of unemployment fluctuates more than the cyclical rate of unemployment. c. The cyclical rate of unemployment is sometimes below the natural rate of unemployment. d. None of the above is correct.