Substitution effect
What will be an ideal response?
takes place when a consumer reacts to a rise in the price of one good by consuming less of that good and more of a substitute good.
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The production possibilities frontier shows
A) what people want firms to produce in a particular time period. B) what an equitable distribution of products among citizens would be. C) the maximum attainable combinations of two products that may be produced in a particular time period with available resources. D) the various products that can be produced now and in the future.
A firm's primary interest when it hires an additional worker is
A) whether or not the new worker gets along with the firm's existing workers. B) the cost of hiring the additional worker. C) how the average output of the firm will be affected by this new worker. D) the extra revenue the firm realizes from hiring that worker.
The key explanation for the prevalence of waterway pollution is
A. the inclusion in production of all costs involving use of the waterway. B. that there are private costs but no costs to society. C. that waterways are not private property and can be used free of charge. D. that waterways are subject to the market’s normal control procedures.
Adverse selection tends to cause which of the following?
a. Placing a strain on the insurance system b. Requiring participation in insurance exchanges c. Mandating the payment of insurance premiums d. Increasing the size of insurance risk groups