A restaurant sells a large soft drink at a fixed price of $1.79. A term used by economists to describe the money received from the sale of an additional large soft drink is
A) marginal revenue.
B) gross earnings.
C) pure profit.
D) net benefit.
Answer: A
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A graph of the value of one variable against the value of another variable is known as a
A) two-dimensional graph. B) three-dimensional graph. C) time-series graph. D) scatter diagram. E) two-variable graph.
Economists assume that rational people
A) never use all available information as they act to achieve their goals. B) respond to economic incentives. C) undertake activities that benefit others and hurt themselves. D) only weigh the benefits and costs of the most desirable alternative actions.
Which economist is credited with having been the first to discuss the "lemons problem"?
A) George Akerlof B) Milton Friedman C) Robert Shiller D) James Tobin
A market failure will occur when all benefits are internalized
Indicate whether the statement is true or false