In the graph showing aggregate demand and aggregate supply after a negative supply shock, we can see that at Point B, ______ at Point A.
a. RGDP is higher than
b. RGDP is lower than
c. price levels are the same as
d. price levels are lower than
b. RGDP is lower than
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A student argues: "Economic surplus is greatest at the level of output where the difference between marginal benefit and marginal cost is largest." This statement is false because
A. the marginal benefit and marginal cost relationship has no relevance to economic surplus. B. the level of output where the difference between marginal benefit and marginal cost is largest will be below the output level needed to have the maximum economic surplus. C. the level of output where the difference between marginal benefit and marginal cost is largest will also have the highest producer and consumer surplus. D. the level of output where the difference between marginal benefit and marginal cost is largest will be above the output level needed to have the maximum economic surplus.
Teddy buys only chocolate chip cookies and hot chocolate and spends all of his income on the two items. Suppose the price of a cookie rises. According to marginal utility theory, Teddy will buy
A) more cookies and less hot chocolate, which decreases his marginal utility from cookies and increases his marginal utility from hot chocolate. B) more cookies and less hot chocolate, which increases his marginal utility from cookies and decrease his marginal utility from hot chocolate. C) fewer cookies and more hot chocolate, which decreases his marginal utility from cookies and increases his marginal utility from hot chocolate. D) fewer cookies and more hot chocolate, which increases his marginal utility from cookies and decreases his marginal utility from hot chocolate.
Which of the following is a reason why some firms do not use commission pay?
A) The best workers stay and less productive workers leave. B) It is difficult to measure the output and attribute output to a particular worker. C) It gives workers incentive to produce more. D) It increases firm profits.
Given that the firm wants to sell both the versions, how should it price its products to have the users self-sort themselves profitably?
a. No-name $60; High-end $130 b. No-name $60; High-end $100 c. No-name $40; High-end $100 d. No-name $40; High end $130