If a firm produces an experience good, its mode of advertising will be
A. direct advertising.
B. not to advertise.
C. persuasive advertising.
D. none of these.
Answer: C
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The marginal revenue product of labor equals
a. MP/wage b. change in total revenue/change in units of labor c. change in total revenue times the change in units of labor d. P/MP e. MP ? wage
Early settlers in the town of Dry Gulch drilled wells to pump as much water as they wanted from the single aquifer beneath the town. (An aquifer is an underground body of water.) As more people settled in Dry Gulch, the aquifer level fell and new wells had to be drilled deeper at higher cost. The residents of Dry Gulch will overuse water relative to the social optimum because ________.
A. each resident will fail to adequately consider the external benefit of his or her own water use B. the marginal cost of water is increasing C. each resident will fail to adequately consider the external cost of his or her own water use D. water is a scarce resource
The combinations of goods X and Y that are affordable to the consumer are defined by the:
A. budget set. B. income line. C. consumption set. D. budget constraint.
Explain how a business chooses to set output
What will be an ideal response?