Tyrell is consuming X and Y so that he is spending his entire income and MUx/Px = 7 and MUy/Py = 7. To maximize utility, he should consume
A. the same amount of X and Y since he is already maximizing utility.
B. less X and more Y.
C. less of both X and Y.
D. more X and less Y.
Answer: A
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There is an externality present only when
A. private costs or benefits diverge from social costs or benefits. B. private costs equal social costs. C. private costs equal social benefits. D. private benefits equal social benefits.
Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10, so that marginal cost is MC = 2q +1 . If market demand is given by QD = 1050 ? 50P, how much will the individual firm produce?
a. 3 b. 4 c. 5 d. 6
Which of the following is an example of roundabout production?
a. A farmer switches from growing soybeans to growing wheat, getting fewer crops per year as a result. b. A farmer switches from growing soybeans to growing wheat, getting more crops per year as a result. c. A self-employed dressmaker becomes a wage worker at a factory that makes dresses. d. A coal mine is sold by its owners to its workers and run as a cooperative. e. A telemarketing firm declares a holiday for two days while a new phone system is installed.
Output per capita is the most commonly used measure of the prosperity of a nation
a. True b. False