In an economy that relies upon barter,
a. trade does not require a double coincidence of wants.
b. scarce resources are allocated just as easily as they are in economies that do not rely upon barter.
c. there is no item in the economy that is widely accepted in exchange for goods and services.
d. All of the above are correct.
c
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If the units of variable input in a production process are 1, 2, 3, 4, and 5, and the corresponding total outputs are 30, 34, 37, 39, and 40, respectively. The marginal product of the fourth unit is:
a. 1. b. 37. c. 2. d. 39.
Suppose total benefits and total costs are given by B(Y) = 600Y ? 12Y2 and C(Y) = 20Y2. What level of Y will yield the maximum net benefits?
A. 600/64 B. 600/32 C. 300/8 D. 300/64
Under an average-cost pricing policy:
A. a regulatory agency picks a price equal to a natural monopoly's marginal cost. B. a regulatory agency picks a price equal to a natural monopoly's average fixed cost. C. a regulatory agency picks a price at which a natural monopoly's demand curve intersects its average cost curve. D. firms earn economic profits greater than zero.
Molly Sharp is producing a documentary about the plight of the six-toed ferrets of Sri Lanka. Molly has spent $125,000 of her own money on this project and the documentary is now complete. Molly just found out that no studio is willing to release her
documentary and she must now shop it to cable television networks, where she knows she will not be able to recoup her investment. Which of the following statements regarding Molly Sharp's documentary is true? A) She should not try to have her documentary aired on television because she cannot recoup her $125,000 investment. B) Since the $125,000 is a sunk cost, she should still try to have her documentary aired on television even though she will not see a profit. C) The $125,000 is a variable cost, so will not be incurred if she chooses not to have her documentary aired. D) The $125,000 investment is an economic cost, and she will still make an accounting profit even if the television network willing to air her documentary pays her less than $125,000.