Market income is
A) profit earned in factor markets.
B) interest earned in factor markets.
C) wages, interest, rent, and profit earned in factor markets.
D) wages, interest, rent, and profit earned in factor markets plus cash payments made to households by government.
C
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On a production possibilities frontier, 500 pounds of apples and 1,200 pounds of bananas can be produced while at another point on the same frontier, 300 pounds of apples and 1,300 pounds of bananas can be produced
Between these points, what is the opportunity cost of producing a pound of apples? A) 2 pounds of bananas B) 5/12 of a pound of bananas C) 0.5 of a pound of bananas D) 2 pounds of apples E) 100 pounds of bananas
The law of diminishing returns states that as a firm increases
A) all the inputs is uses, the marginal product of each of these inputs always decreases. B) a variable input, with a given quantity of fixed inputs, the firm's marginal cost eventually decreases. C) a variable input, with a given quantity of fixed inputs, the marginal product of the variable input eventually decreases. D) a variable input, given the quantity of fixed inputs, the firm's average total cost will eventually decrease.
Which of the following is an example of a Pigovian tax?
A) a tax imposed on a utility that internalizes the cost of externalities caused by the utility B) payments by utilities to obtain tradable emission allowances C) payments for licenses to pollute D) a payroll tax
If total production is less than total expenditures, then business firms
A) have overproduced. B) will cut back on production. C) will raise production. D) will experience increases in inventory. E) a and d