Water is essential to life while diamonds, while beautiful, are not essential to life. In the marketplace, diamonds are very expensive while water is relatively cheap. We can resolve this paradox by focusing on
a. total utility rather than average utility
b. average utility rather than marginal utility
c. marginal utility rather than total utility
d. total utility rather than marginal utility
e. average utility rather than total utility
C
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The supply and demand mechanism will bring an international market into equilibrium a. at a price below the domestic price in an exporting country
b. where domestic supplies are less than domestic demand in an exporting country. c. with an exporting nation's price higher than the importing nation's price. d. when the quantity of exports supplied by the exporters beyond their domestic consumption is equal to the quantity of imports demanded by the importers.
The minimum point of the average total cost curve occurs at an output level that corresponds to
a. the maximum possible total cost b. an average total cost equal to the marginal cost of the next unit c. an average variable cost that is greater than the marginal cost of the next unit d. a marginal cost that is decreasing e. a constant average fixed cost
Which of the following sets of terms describes the problem of scarcity in economics?
A) goods, land, and needs B) labor, needs, and opportunity costs C) choices, opportunity costs, and trade-offs D) production, consumption, and wants
A profit-maximizing monopsonist will hire workers up to the point at which
A) W = MRP. B) MRP = MFC. C) W = MFC. D) W = MRP = MFC.