You decide to skip going to a movie with friends and stay home and study. How did you reach your decision?
a. By determining that you were not interested in the movie
b. By evaluating that the marginal cost of studying exceeded the marginal benefit
c. By determining that the marginal benefit of studying was greater than the marginal cost
d. By realizing that there was a very high opportunity cost associated with studying
c. By determining that the marginal benefit of studying was greater than the marginal cost
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Refer to Figure 24-1. Ceteris paribus, a decrease in the price level would be represented by a movement from
A) AD1 to AD2. B) AD2 to AD1. C) point A to point B. D) point B to point A.
Government policies resulting in reduced efficiency include (i) the welfare system (ii) unemployment insurance (iii) progressive income tax
a. (i) only b. (ii) only c. (i) and (ii) only d. (i), (ii), and (iii)
An economic model is a purposeful simplification of reality, whose function includes:
A. Understanding the full complexity of the real world B. Predicting the behavior of each and every individual or organization C. Analyzing the behavior of a typical or average consumer or firm D. Forecasting economic random events with a high level of accuracy
When a resource has a perfectly inelastic supply curve
A) the amount of economic rent for this resource is determined by its supply. B) the amount of economic rent for this resource is determined by demand for the resource. C) the amount of economic rent for this resource is determined by the government. D) there is no economic rent being earned by this resource.