The law of diminishing marginal product indicates that
A. total product will eventually decrease.
B. average product will eventually decrease.
C. resources are inefficient.
D. marginal product will eventually decrease.
Answer: D
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Mister Jones was selling his house. The asking price was $220,000, and Jones decided he would take no less than $200,000. After some negotiation, Mister Smith purchased the house for $205,000. Smith's consumer surplus is
A) $5,000. B) $15,000. C) $20,000. D) not able to be calculated from the information given.
A new U.S. tariff on imported steel would be likely to: a. raise the cost of production to steel-using American firms. b. generate tax revenue to the government
c. increase U.S. production of steel. d. all of the above
In order for a central planner to achieve the invisible-hand type efficiency of a free market, the planner would
A. need masses of statistics. B. be required to makes enormous calculations. C. need to be able to measure a consumer’s marginal utility in order to equate MU with MC. D. All of the above would be required.
In an Added Perspective, we learn that Elaine Rodier gave up a job as a nursery school teacher to make appetizers. In doing this, she incurs a(n)
a. implicit cost less than her lost income b. explicit cost at least equal to her lost income c. opportunity cost at least equal to her lost income d. variable cost equal to her lost income e. marginal cost equal to her lost income