An external benefit is the benefit experienced by people who:
A. do not decide how much of the good to produce or consume.
B. did not know why they are experiencing the benefit.
C. decide how much of the good to produce or consume.
D. consume the good.
Answer: A
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In Figure 3-6 above, at point J
A) there is unplanned inventory investment. B) there is unplanned inventory disinvestment. C) there is no change in inventory levels. D) intended and unintended inventory investment are equal.
Monetary & Fiscal policy
What will be an ideal response?
Figure 5.4 shows a firm's marginal cost, average total cost, and average variable cost curves. The average total cost curve is downward-sloping as output increases from Q = 50 to Q = 100 because:
A. increasing average variable cost outweighs decreasing average fixed cost. B. decreasing average fixed cost outweighs increasing average variable cost. C. diminishing returns are not severe enough to outweigh decreasing average fixed cost. D. marginal cost is increasing.
The dominant strategy allows a firm to
A) obtain the highest benefit, regardless of its rivals' actions. B) transform a negative-sum game into a positive-sum game. C) transform a zero-sum game into a positive-sum game. D) escape from a Prisoners' Dilemma situation.