Money
a. is more efficient than barter.
b. makes trades easier.
c. allows greater specialization.
d. All of the above are correct.
d
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How is a compensated demand curve different from an ordinary demand curve? Why must the law of demand always hold for one while it may be violated for the other?
What will be an ideal response?
A CPA recently has come to expect higher prices for expert tax advice in the near future. We would expect
a. the CPA to supply more expert tax advice now than she was supplying previously. b. the CPA to supply less expert tax advice now than she was supplying previously. c. the demand for this CPA's expert tax advice to fall. d. no change in the CPA's current supply; instead, future supply will be affected.
Suppose that Steve and Susie each perceives $200 of marginal benefit from a proposed new park, whereas Elizabeth perceives $800. If the proposed tax levied on each for the park would be $300, a majority vote will:
A. defeat this project and resources will be underallocated to it. B. defeat this project and resources will be efficiently allocated. C. pass this project and resources will be underallocated to it. D. pass this project and resources will be overallocated to it.
Marginal revenue product
A. increases when marginal product decreases. B. eventually increases as labor input increases. C. measures the benefit to the firm from hiring an additional unit of labor. D. is calculated as the marginal product of labor divided by the price of output.