What is meant by the statement that "optimal decisions are made at the margin"?
What will be an ideal response?
In economics, the word "marginal" means "extra" or "additional." Economists reason that the optimal decision is to continue any activity up to the point where the marginal benefit equals the marginal cost, so optimal decisions are made at the point where the extra benefit received from an activity is equal to the extra cost associated with that activity.
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What is measured on the horizontal axis of the aggregate demand/aggregate supply model?
A) real wealth B) real Gross Domestic Product (GDP) C) prices D) nominal income
The demand curve for the product of a monopolist is
a. a straight horizontal line. b. identical to the market demand curve. c. identical to its MR curve. d. below its MR curve.
The federal government deficit or surplus
A. is not affected by the level of GDP. B. is not affected by discretionary fiscal policy. C. may be more a symptom of economic distress than a result of intentional fiscal policy. D. should be balanced at all times to prevent business cycles.
What is a cartel?
What will be an ideal response?