Marginal benefits and marginal costs:
A. capture the way total benefits and total costs change as the amount of an activity changes just a little bit.
B. are constant, regardless of the amount of an activity that is pursued.
C. tend to increase as a decision maker does more of an activity.
D. tend to decrease as a decision maker does less of an activity.
A. capture the way total benefits and total costs change as the amount of an activity changes just a little bit.
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The above figure shows the market for oil. Because of the development of a new deep sea drilling technology the
A) demand curve shifts from D1 to D2 and the supply curve does not shift. B) demand curve shifts from D1 to D2 and the supply curve shifts from S1 to S2. C) demand curve does not shift, and the supply curve shifts from S2 to S1. D) demand curve does not shift, and the supply curve shifts from S1 to S2.
A monopoly sets a market price that is higher than the marginal cost of production. This fact implies that a monopoly's allocation of resources is:
a. unfair. b. inefficient. c. discriminatory. d. excessive.
The natural rate of unemployment worsens if:
a. Actually, the natural rate cannot worsen. That's why it's called "natural." b. Capital markets become more competitive. c. A nation's resource endowments expand. d. Unemployment benefits drastically improve. e. Real wages become more flexible.
The existence of a deadweight loss associated with a monopoly can be seen because
A) consumers are willing to pay more for the last unit of output than it costs to produce. B) the cost of the last unit produced is more than consumers are willing to pay for it. C) the producer surplus is larger than in a competitive market. D) None of the above.