The optimal number of units to produce is best expressed when
A. marginal benefit exceeds marginal cost.
B. marginal cost exceeds marginal benefit.
C. marginal benefit and marginal cost are close to equal.
D. marginal benefit and marginal cost are equal to zero.
Answer: C
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Suppose the value of the price elasticity of demand is -3. What does this mean?
A) A 1 percent increase in the price of the good causes quantity demanded to decrease by 3 percent. B) A $1 increase in price causes quantity demanded to fall by 3 units. C) A 1 percent increase in the price of the good causes quantity demanded to increase by 3 percent. D) A 3 percent increase in the price of the good causes quantity demanded to decrease by 1 percent.
Does the raising of reserve requirements automatically decrease the money supply? Why or why not?
What will be an ideal response?
Which of the following is an example of a situation that would create an oligopoly? a. Boron InfoTech installs fiber optic cables throughout the community so that adding new customers incurs very little marginal cost. b. Aaron Super-sports has patented a super-grip glove that can be used for hiking
c. AquaHuman Mineral Water can only produce two-fifths of the market demand at the minimum point of the average total cost curve. d. Finch Brothers, a publishing house, holds the copyright for a popular superhero trilogy.
"Wal-Mart is a low-wage firm and this indicates that it exploits its workers." Which of the following should cause one to question the validity of this statement?
What will be an ideal response?