Marginal revenue is the change in total revenue from selling one more unit of output
a. True
b. False
A
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Refer to A Negative Externality Problem. Suppose there is no attempt to internalize the externality. Pigovian analysis indicates that the externality creates a deadweight loss equal to
Demand for a good is given by Q = 100 - P. The private marginal cost of production is MCP = 10 + Q. There is a $10 per unit negative production externality in this situation. a. $0 b. $25 c. $50 d. $100
Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
In professional golf, a tournament winner might win, say, $1 million, whereas second place wins only $600,000. Why might golf have a 40% reduction in prize money from first and second place?
A) To ensure that there is enough money to pay those who finish near last. B) To motivate golfers to take risks they might not otherwise take. C) To motivate golfers to not take risks they might otherwise take. D) The Professional Golfers Association is a cartel.
Marginal utility is the extra utility a consumer derives from consuming an extra unit of a good
a. True b. False