Diminishing marginal productivity implies decreasing total product
a. True
b. False
Indicate whether the statement is true or false
False
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Refer to Common Property I. If access to the common property cannot be prohibited, then the resulting social gain equals
The following questions refer to the accompanying diagram, which shows the benefits and costs associated with the use of a common property.
a. zero.
b. area E.
c. area A + B.
d. area C + D.
According to Adam Smith, the "invisible hand" refers to
As inflation rates increase, money becomes less useful as a
A) store of value. B) double coincidence of wants. C) unit of account. D) medium of exchange.
The Yankee Candle Company, in Hatfield, Massachusetts, makes scented candles. When strawberry-scented candles are made, townspeople enjoy the scent that covers the town. When potpourri-scented candles are made, people stay indoors to avoid the scent. We can infer that if the scented-candle markets are in equilibrium
a. neither strawberry nor potpourri scented candles will be produced b. strawberry candles' prices are higher than the socially optimum c. potpourri candles' prices are higher than the socially optimum d. candle production generates only negative externalities e. candle production technologies are inefficient