Suppose the average person needs 8 glasses of water each day to maintain optimal health. What would an economist conclude?
A) The average person will therefore drink 8 glasses each day.
B) The average person will therefore drink more than 8 glasses each day, just to play it safe.
C) There are no substitutes for water.
D) The amount the average person drinks will depend upon the opportunity cost of acquiring water.
D
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Two countries engaged in trade in products with scale economies, produced under conditions of monopolistic competition, are likely to be engaged in
A) intra-industry trade. B) price competition. C) inter-industry trade. D) Heckscher-Ohlinean trade. E) immiserizing trade.
Learning by doing, which leads to lower costs in the long run, is often
A) increased when new machinery is brought into the production process. B) a function of cumulative output, that is producing more of the good or service. C) improved through better use of computers in the production process. D) not very important to most firms.
Brad ate four bags of chips at the baseball game. The first bag tasted best, but he found that as he ate more chips the amount of extra satisfaction he was receiving was beginning to fall. This would demonstrate
A. the law of diminishing costs. B. the law of diminishing marginal utility. C. the law of total utility maximization. D. the law of zero utility.
Which of the following is NOT a club good?
A) cable television B) a rock concert C) a country club D) a baseball bat