If you are at an all-you-can-eat buffet dinner and you are considering whether to eat another dessert, you, as a rational consumer should decide to eat the desert
A. no matter what because you want to get more for your money.
B. if it brings you more pleasure than the price you paid for the meal.
C. if it brings you any pleasure at all.
D. if it brings you as much pleasure as the desert costs if it is ordered a la carte.
Answer: C
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Suppose Joe can prepare 20 sandwiches or 10 pizzas in an hour and Beth can produce 36 sandwiches or 27 pizzas. The concept of comparative advantage concludes that
A) Beth should produce both goods because she can produce more of both goods in an hour than can Joe. B) Beth should produce sandwiches and Joe should produce pizza. C) Beth should produce pizza and Joe should produce sandwiches. D) Beth should produce both goods and Joe should produce sandwiches.
A side effect of an action that affects the well-being of third parties is
A. a marginal cost. B. a marginal private benefit. C. an externality. D. a and b E. all of the above
Suppose that a sharp downturn in the price of a country's prime manufacturing product results in a terrible recession and a massive decline in the general income level of the citizens. Other things constant, what would be the recession's most probable effect on money demand in the country?
a. People will hold more money for any purpose, resulting in a decline in money demand. b. Local M1 money demand will rise. c. The transactions demand for money will fall such that the quantity of money demanded will be lower at any given interest rate level. d. The speculative demand for money will fall, causing a downward movement along the money demand curve. e. The precautionary demand for money will increase, causing an upward shift in the money demand curve.
How much is this firm's output?
