If an activity is worth pursuing at all, then it should be pursued up to the point where
a. total cost equals total benefit.
b. average cost equals average benefit.
c. marginal cost equals marginal benefit.
d. sunk costs equal zero.
c. marginal cost equals marginal benefit.
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Ajax has just discovered that the marginal revenue product generated by the last worker hired was $75 while the marginal factor cost was $95. What should Ajax do?
A) Leave the level of production unchanged. B) Increase the amount produced. C) Reduce the amount produced. D) Collect more information before making a decision.
Which of the following best represents the effects of a decrease in the price of tea? a. A leftward shift in the demand for tea
b. A downward movement along the demand curve for tea. c. A rightward shift in the demand for tea. d. An upward movement along the demand curve for tea.
To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
Which is included in GDP?
A. Bread for a restaurant. B. Used autos purchased by consumers. C. Social Security payments. D. Telephone service for a home.