Recall the Application about Rory McIlroy and weed-whacking to answer the following question(s). The Application assumes that Rory McIlroy could whack down all the weeds on his estate in one hour at an opportunity cost of $1,000, but it would take 20 hours for a gardener to do it at a price of $10 per hour.This Application addresses the economic concept of:
A. the marginal principle.
B. diminishing returns.
C. specialization and exchange.
D. real versus nominal costs.
Answer: C
You might also like to view...
If MUx/Px > MUy/Py, the consumer can increase utility by buying less of good y, which means the MUy will rise
a. True b. False
Which of the following is not correct?
a. When a union is present in a labor market, wages may not be determined by the equilibrium of supply and demand. b. Like any cartel, a union is a group of sellers acting together in the hope of exerting their joint market power. c. When unions raise wages above equilibrium, the quantity of labor supplied decreases, and the quantity of labor demanded increases. d. Most workers in the U.S. economy are not members of a union.
With what measure does cyclical unemployment tend to move?
A. GDP deflator B. Nominal GDP C. Inflation D. Per capita GDP growth rate
Consider the following information for a simultaneous move game: If you advertise and your rival advertises, you each will earn $5 million in profits. If neither of you advertises, you will each earn $10 million in profits. However, if one of you advertises and the other does not, the firm that advertises will earn $15 million and the non-advertising firm will earn $1 million. If you and your rival plan to be in business for only one year, the Nash equilibrium is:
A. for your firm to advertise and the other not to advertise. B. for neither firm to advertise. C. for each firm to advertise. D. None of the answers is correct.