Marginal productivity analysis shows that a drop in the price of the product will cause input use to
A. increase.
B. decrease.
C. stay the same.
D. The information is insufficient to provide an answer.
Answer: B
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Suppose the marginal benefit the owner of a cherry orchard derives from hiring Lauren to pick cherries is $8 per hour. If the wage rate that Lauren earns is $7 per hour, then the orchard owner's surplus from Lauren's labor is ________ per hour
A) $7 B) $15 C) $1 D) $8 E) $0
In order to be binding, a price ceiling
A) must be high enough for firms to earn a profit. B) must coincide with the free market equilibrium price. C) must lie below the free market equilibrium price. D) must lie above the free market equilibrium price.
The price elasticity of demand for a printer is estimated to be 1 no matter what the price or quantity demanded. An increase in price by 10% will
a. Increase quantity demanded by 10% b. Decrease quantity demanded by 10% c. Increase demand by 10% d. Decrease demand by 10%
All of the following are traditional economic views except:
A. there is no such thing as a bad choice. B. choice architecture is ineffective. C. revealed preference shows researchers what the bad choices are. D. choice architects have a responsibility to remain neutral when it comes to choices.