If the total cost of producing 6 units is $228 and the total cost of producing 7 units is $245, what is the marginal cost of producing the seventh unit?
a. $35
b. $245
c. $3
d. $38
e. $17
e
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Assume the Nozick rules are being followed in the economy so that the distribution of income is fair. What must be true for this to create an efficient allocation of resources?
A) All people are earning equal incomes. B) There are no public goods, monopolies, high transactions costs, or external costs and benefits. C) The costs of administering redistribution equals the benefits the poor receive. D) The government must redistribute income in a fashion that minimizes the "big tradeoff." E) The government must allocate resources using a command mechanism.
Suppose that the price elasticity of demand for museum tickets is equal to –1.8 . If the price of a museum ticket rises by 30 percent, what will happen to quantity demanded?
What will be an ideal response?
In a booming economy, fiscal policy automatically becomes:
A. contractionary as tax rates rise and welfare payments fall. B. expansionary as tax rates rise and welfare payments fall. C. contractionary as tax rates fall and welfare payments rise. D. expansionary as tax rates fall and welfare payments rise.
A firm manager predicts and reacts to the moves of the firm’s competitors within the industry. What concept is illustrated by this example?
a. perfect competition b. prisoners’ dilemma c. economies of scale d. mutual interdependence