Marginal cost pricing in competitive markets results in all but which one of the following?
A. Maximization of consumer utility.
B. An efficient mix of goods and services being produced.
C. Output being produced where price equals the opportunity cost of the last unit being produced.
D. The information necessary for consumers to make rational choices between alternative goods and services.
Answer: A
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A worker in Vietnam can earn $6 per day making cotton cloth on a hand loom. A worker in the United States can earn $85 per day making cotton cloth with a mechanical loom. What is the likely explanation for the difference in wages?
a. U.S. textile workers belong to a union, whereas Vietnamese textile workers do not belong to a union. b. There is little demand for cotton cloth in Vietnam and great demand in the U.S. c. Labor is more productive making cotton cloth with a mechanical loom than with a hand loom. d. Vietnam has a low-wage policy to make its textile industry more competitive in world markets.
Why would you expect the demand for diamond jewelry to fall faster than plastic, costume jewelry when all incomes fall?
What will be an ideal response?
The biggest benefit to members of a union is:
A. being able to bargain as a group. B. keeping non-union workers out of their industry. C. negotiating minimum wage legislation. D. getting raises without having to do any work.
If a corporation fails, the last recipients of funds that may remain are
A) preferred stockholders. B) common stockholders. C) bond holders. D) government tax collectors.