A foot-Loofah is worth $15 to Edna. But she buys one on sale at Bath and Body works for just $8 what is the consumer surplus that results from Edna's purchase?
a. $8
b. $15
c. $7
d. $23
e. Cannot be determined from the information given.
c. $7
(15 - 8 = 7)
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The law of diminishing returns to labor implies that
a. capital is more productive than labor b. workers become less efficient once they have a secure job c. output increases at a decreasing rate with the employment of new workers d. employers pay workers a wage rate that is less than the workers' MRP e. capital is less productive than labor
If a hurricane were to wipe out the majority of the eastern seaboard in the United States, it would likely cause a:
A. short-run supply shock. B. long-run supply shock. C. long-run demand shock. D. short-run demand shock.
Explain how a successful advertising campaign will affect the demand curve for the product being advertised.
What will be an ideal response?
In a voluntary contributions experiment described at the end of the chapter, the chump is the individual who:
A. is systematically exploited by others. B. contributes money to fund a public good equal to the benefits they ultimately receive. C. free-rides. D. contributes money to fund a public good much less than the benefits they ultimately receive.