List the four broad categories of factors of production
What will be an ideal response?
labor, capital, natural resources, and entrepreneurship
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Suppose you play a round of golf costing $75. The golf takes four hours to play. If you were not playing golf you could be working and earning $40 per hour. The opportunity cost of your golf game is:
a) $75. b) $235. c) $155. d) $160.
The balancing of marginal costs and marginal benefits to obtain an efficient outcome is known as the equimarginal principle.
a. true b. false
When an industry is a natural monopoly
A. the economies of scale in it are very great. B. it would be most efficient to have several (or many) firms competing to supply the market. C. it has a perfectly elastic industry demand curve. D. the typical firm's marginal cost curve is everywhere above its average cost curve.
In his book The Wealth of Nations, Adam Smith employed the example of a pin factory in order to explain what economic concept?
A) the relationship between the marginal and average product of labor B) the law of diminishing returns C) why no firm would want to hire so many workers as to experience a negative marginal product of labor D) the division of labor