______________ is the additional output that can be produced by adding one more unit of a particular input while holding all other inputs constant.
Fill in the blank(s) with the appropriate word(s).
Ans: Marginal Product
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The above figure shows Jane's budget line and two of her indifference curves. Jane's marginal rate of substitution is
A) the rate at which she would give up a lobster dinner for a steak dinner and consider herself just as well off. B) equal to the ratio of the price of a steak dinner to the price of a lobster dinner when she is at her best affordable point. C) equal to 2 lobster dinners per steak dinner at her best affordable point. D) Both answers A and B are correct.
Refer to Figure 5-9. An efficient way to get the firm to produce the socially optimal output level is
A) to grant a subsidy to enable the industry to internalize the external costs of production. B) to assign property rights to the firms in the industry. C) to impose a tax to make the industry bear the external costs it creates. D) for government to set a quota on the quantity of toilet paper that the toilet paper industry can produce.
Optimal currency areas should have ________ in order to succeed
A) high labor mobility B) low labor mobility C) imperfectly mobile capital D) few policy externalities
Everything else held constant, which of the following does NOT cause aggregate demand to increase?
A) an increase in net exports B) an increase in government spending C) an increase in taxes D) an increase in consumer optimism