How does the market for inputs like labor differ from the market for goods and services?
What will be an ideal response?
A factor of production is used in the production of other goods. The market for factors of production like labor is different from the market for goods and services in that the demand for factors is derived from the demand for final goods and services.
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When a nuclear-powered electrical plant is permitted to dump radioactive waste at no cost into a recreational waterway lowering the value boaters receive from the waterway, the
a. firm's cost of producing electricity will be higher than the community's true opportunity cost. b. firm will tend to produce too little electricity from the viewpoint of economic efficiency. c. community generally receives an external benefit from the production of electricity. d. firm's cost of producing electricity will be lower than the community's true opportunity cost.
In the late 1920s, you could buy $10,000 worth of stock by putting down as little as
A. $100. B. $1,000. C. $2,500. D. $5,000.
The interest rates on outstanding credit card balances are generally high because
A) the default rate on credit card loans is high and there are no assets backing these loans. B) the banks "price gouge" consumers in this market. C) there is little competition in this lending market. D) the administrative costs associated with these loans are low.
If AVC is $10 when P = MC, a firm
A. is experiencing economies of scale. B. should shut down if price is less than $10. C. is producing too little output. D. will have positive economic profits if price is greater than $10.