The idea that it takes 90 percent of your time to clean up the last 2 percent of your house illustrates that
A. the marginal benefit of cleaning up is constant.
B. the marginal cost of cleaning up slopes downward.
C. the marginal benefit of cleaning up slopes upward.
D. the marginal cost of cleaning up slopes upward.
Answer: D
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The Coase Theorem implies that the reason people sue each other in court is that transactions costs are too high.
Answer the following statement true (T) or false (F)
Firm A and Firm B are the only two producers of a new solar powered cell. Society will gain the most when both firms decide to: a. form a cartel
b. merge. c. differentiate their products. d. produce at the downward-sloping part of their respective average total cost curves.
Which of the following reflects the concept of required reserves?
A. The money multiplier is greater than 1. B. Required reserves are equal to total reserves. C. Excess reserves are equal to 0. D. Banks can lend only their required reserves.
Joe trades an apple to Winston for two oranges. Because the exchange is voluntary, we can conclude that
a. Joe is better off because he gets two things but Winston is worse off because he gives up more items than he receives. b. Winston is better off because he gives more than he receives. c. both Joe and Winston are worse off. d. both Joe and Winston are better off.