Which curve is the same as the market demand curve? Why are the curves the same?
What will be an ideal response?
The market demand curve is the same as the marginal social benefit curve. For any quantity, the demand curve shows the dollar value of other goods and services a consumer is willing to forgo to get another unit of the good. (This amount is the maximum price the consumer is willing to pay and equals the price from the demand curve vertically above each quantity.) But the amount of other goods and services the consumer is willing to forgo is the marginal social benefit of the good. Hence along the market demand curve the price associated with each quantity of the good is the same as the marginal social benefit of that quantity. (So that, for instance, the price associated with the 3rd quantity is the same as the marginal social benefit of the 3rd unit.) Therefore the market demand curve is the same as the marginal social benefit curve.
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Aimee sells hand-embroidered dog apparel over the Internet. Her annual revenue is $128,000 per year, the explicit costs of her business are $42,000, and the opportunity costs of her business are $30,000. What is her accounting profit?
A) $12,000 B) $56,000 C) $86,000 D) $98,000
Which of the following is most likely to help the residents of a nation produce more goods and services and achieve higher income levels?
A) a smaller trade sector B) a higher rate of investment C) higher tax rates D) greater use of taxation to transfer income from the rich to the poor
In Japan, the market value of the land is approximately four times that of all the land in the United States, even though Japan is only about the size of California. The most likely explanation for this fact is
A. greater demand for land in Japan relative to the supply than in the United States. B. land is very productive in Japan. C. land is not fixed in supply in the United States. D. Japanese workers are very productive.
An increase in real GDP per capita is the strict definition of economic growth that serves to
A. increase the money supply. B. decrease inflation. C. increase the population. D. increase living standards.