Positive economics encourages value judgments.
a. true
b. false
b. false
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What is the main reason for changes in GDP in the short run?
What will be an ideal response?
Marginal utility is
A) the utility received by the last consumer of a good. B) the total utility received from consuming a given quantity of a good divided by the number of units consumed. C) the change in total utility from consuming an additional unit of a good. D) the utility received from consuming the first unit of a good.
The XYZ Co sells shirts. Shirts with the company label on the tag are perceived to be of higher quality than shirts with the store's label. Yet, shirts are of identical quality regardless of label. The demand for perceived high-quality shirts is ph = 50 - qh. The demand for perceived low-quality shirts is pl = 10 + ph - ql. The firm can produce shirts at TC = qh + ql. How many shirts does the
firm label as low quality and how many as high quality? What prices are charged? What will be an ideal response?
If perfectly competitive firms have to account for external costs of production, then at the equilibrium level of output
A. P < MSC B. P = MC C. MC = MSC D. Both A and C are correct.