According to the rule of rational choice, an individual will undertake an activity as long as:
a. the expected marginal benefits are less than the expected marginal costs.
b. the expected marginal benefits are greater than the expected marginal costs.
c. total expected costs exceed total expected benefits
d. total expected benefits exceed total expected costs.
b
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The interest rate at which the Federal Reserve Banks lend to commercial banks is called the ________.
A. discount rate B. short-term rate C. prime rate D. federal funds rate
If we observe a market where the quantity supplied exceeds the quantity demanded, but the market price does not fall, then one explanation for this observation is
A. the market has a price ceiling in place. B. consumers don’t really like this product. C. the market has a price floor in place. D. sellers must produce a minimum quantity of the good, regardless of the demand for the product.
Over the past twenty years, the number of small family farms has fallen significantly and in their place there are fewer, but larger, farms owned by corporations. Which of the following best explains this trend?
A) diminishing returns to labor in farming B) declining productivity C) diseconomies of scale in farming D) economies of scale in farming
If the exchange rate changes such that fewer euros, the French currency, are required to buy one dollar, then
A. Americans will buy fewer goods and services from France. B. the French will buy fewer goods and services from the U.S. C. the dollar has appreciated in value. D. the euro has depreciated in value.