Refer to the accompanying table below. According to the Cost-Benefit Principle, how many units of this activity should be carried out?Units of ActivityTotal CostTotal Benefit0$0$01$30$1002$40$1603$60$1904$100$2105$150$2206$210$225
A. 6
B. 1
C. 4
D. 3
Answer: D
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Economic theories, or models, enable us to predict and to give reasonable explanations regarding economic variables
a. True b. False Indicate whether the statement is true or false
Econville suffers from a massive earthquake and tsunami that destroys a fourth of its physical resources. What happens to the production possibility frontier?
a. The production possibility frontier does not change. b. The production possibility frontier shifts to the right. c. The production possibility frontier shifts to the left. d. The production possibility frontier shifts down for capital goods but does not change for consumer goods.
A binding price floor creates
a. deadweight loss. b. consumer surplus. c. producer surplus. d. deadweight gain.
Why is it considered "ideal" for price to just equal marginal cost?