Which of the following creates an incentive to increase the amount of an activity?
A) an increase in the marginal cost of the activity and a decrease in the marginal benefit of the activity
B) a decrease in the marginal cost of the activity and an increase in the marginal benefit of the activity
C) constant marginal cost and constant marginal benefit of the activity
D) None of the above create an incentive to increase the amount of an activity.
B
You might also like to view...
Bananaland produces only bananas and sunscreen and the quantities and prices for 2012 and 2013 are given in the table above. The base year is 2012. In 2013, which is larger, nominal GDP or real GDP?
A) Both are the same size. B) Nominal GDP is larger. C) Real GDP is larger. D) The answer is ambiguous. E) More information is needed to determine which is larger.
Movement along an indifference curve causes the loss in marginal utility (MU) of one good to ____ the marginal utility (MU) gained from another good
a. exceed b. reduce c. equal d. maximize
Which of the following is not a function of the Federal Reserve System?
a. limiting the national debt b. setting the required reserve ratio for the deposit holdings of depository institutions c. buying and selling government bonds to control the size and growth rate of the money supply d. controlling inflation
Which of the following provides the foundation of the case for free trade?
a. the law of diminishing marginal utility b. the anti-dumping argument c. the industrial diversity argument d. the law of comparative advantage