Total net benefits are maximized when marginal net benefits are
a. Maximized
b. Minimized
c. Zero
d. Equal to the discount rate
e. Equal to price
Ans: c. Zero
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If skilled and unskilled labor are substitutes, then an increased minimum wage would tend to
A) reduce the demand for both unskilled and skilled workers. B) reduce the quantity demanded of unskilled workers and increase the demand for skilled workers. C) reduce the demand for unskilled workers and increase the quantity demanded of unskilled workers. D) reduce the quantity demanded for both unskilled and skilled workers.
The above table shows Priscilla's marginal utility from the two goods she consumes, pizza and Pepsi. The price of a slice of pizza is $2 and of a can of Pepsi is $1. Suppose Priscilla has $6 to spend
Which combination of pizza and Pepsi will maximize Priscilla's utility? A) 3 slices of pizza B) 2 slices of pizza and 2 cans of Pepsi C) 3 cans of Pepsi and 1 slice of pizza D) 1 slice of pizza and 3 cans of Pepsi
In the long-run equilibrium in a perfectly competitive market,
A) the firms make an economic profit. B) the firms' owners make a normal profit. C) the average total cost is maximized. D) marginal cost is at a minimum.
Negative externalities are created when
A) an increase in the price of butterfat drives up the price of ice cream. B) a driver leaves his car in a parking space after the meter expires and receives a ticket. C) a driver drives recklessly on a busy highway. D) a driver pulls over to help a stranded motorist fix a flat tire.