The cost-benefit model used by economists is:
A. useful because everyone follows it all of the time.
B. useful because most people follow it most of the time.
C. unrealistic because everyone can think of times when he or she violated the principle.
D. unrealistic because it is too detailed and specific to apply to most situations.
Answer: B
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Suppose you bought a concert ticket from Ticketmaster for $50, but when you get to the concert, there are a large number of people waiting outside who offer to pay you more than $50 for your ticket. What is probably true?
A. There is an excess supply of tickets at the Ticketmaster price. B. There is an excess demand for tickets at the Ticketmaster price. C. The Ticketmaster price is the equilibrium price. D. The Ticketmaster price was above the equilibrium price.
Suppose a business firm dumps its used car batteries into a river.
A. The company's actions constitute an external cost. B. The company's actions constitute an external benefit. C. The company's actions would be an example of the market system efficiently allocating resources. D. The company's actions damage no one but itself.
A monopsonistic employer will pay a wage rate
A) less than the labor's MRP. B) greater than the labor's MRP. C) equal to the labor's MRP. D) equal to MFC.
What are two key facts that serve as the rationale for the multiplier effect?
What will be an ideal response?