Suppose the cost to Tim of a third glass of soda is zero because he's at a restaurant that gives free refills. According to the Cost-Benefit Principle Tim should:
A. drink a third glass of soda.
B. drink a third glass of soda if the benefit of doing so is positive.
C. not drink a third glass of soda.
D. drink a third glass of soda if his benefit from drinking his second glass of soda was positive.
Answer: B
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A fall in the price level brings a ________ in the real wage rate that ________ profits and can lead to ________
A) fall; decreases; new firms entering business B) rise; reduces; firms going out of business C) rise; reduces; new firms entering business D) fall; increases; firms going out of business E) rise; increases; new firms entering business
By using open market operations, the Federal Reserve
A) adjusts the supply of reserves to keep the federal funds interest rate equal to its target. B) controls banks' demand for reserves, thereby keeping the federal funds rate equal to its target. C) adjusts the demand of reserves to keep bank rates in line with the federal funds rate target. D) adjusts the supply and demand of reserves to keep the federal funds interest rate equal to its target. E) None of the above answers is correct.
Which of the following goods is excludable but not rival in consumption?
a. a congested toll road b. fire protection in a small town c. a tornado siren d. whales in the ocean
Jamaica has a comparative advantage in the production of aluminum, but currently allows no international trade in aluminum. We can conclude that a. the domestic price of aluminum in Jamaica is higher than the world price for aluminum. b. Jamaica has an absolute advantage in the production of aluminum
c. Jamaica should import aluminum. d. the domestic price of aluminum in Jamaica is lower than the world price for aluminum.