The cost-benefit model used by economists is:
A. useful because most people follow it most of the time.
B. unrealistic because it is too detailed and specific to apply to most situations.
C. useful because everyone follows it all of the time.
D. unrealistic because everyone can think of times when he or she violated the principle.
Answer: A
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The only two firms in a market are trying to decide what price to charge. The payoff matrix for this duopoly game is shown above. The payoffs are thousands of dollars of economic profit
In the Nash equilibrium, Firm A will set a price of ________ and Firm B will set a price of ________. A) $10; $20 B) $20; $10 C) $10; $10 D) $20; $20 E) $20; something, but more information is needed to determine Firm B's price
In the monetary intertemporal model, the long-run effects of an increase in the growth rate of money include
A) an increase in output and an increase in the real wage. B) an increase in output and a decrease in the real wage. C) a decrease in output and an increase in the real wage. D) a decrease in output and a decrease in the real wage.
Collective consumption goods are _____
a. goods that can be consumed by additional consumers without reducing the amount available to existing consumers b. goods that can be produced for everyone at zero marginal cost c. goods that are produced and consumed by an entire group, such as a commune that raises its own vegetables d. goods that once produced, can be consumed by additional consumers without reducing the amount available to existing consumers
A cigar factory employs 20 workers and produces 1,000 cigars a day. The company reduces the workforce to 19 workers and produces 912 cigars a day. The 20th worker:
A. had a marginal product of 88 cigars. B. must have had a lower marginal product than the 19th worker. C. caused average product to fall. D. All of these are true.