You spend $150 every month planting flowers in your front yard. Your neighbor has told you that she derives $20 a month in enjoyment from being able to look at your beautiful flowers. Which of the following is true?
A. You should refuse to spend anything on flowers unless your neighbor pays you $20 a month.
B. If you took into consideration the benefits your neighbor derived, the efficient level of flower planting would be less than $150 a month.
C. If you took into consideration the benefits your neighbor derived, the efficient level of flower planting would be greater than $150 a month.
D. You are spending too much on flowers, because your neighbor derives only $20 worth of benefits.
Answer: C
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Answer the following statement(s) true (T) or false (F)
1. A competitive firm's short-run demand for labor will rise when the price of its product rises. 2. Increased use of machinery always hurts workers by lowering the demand for their labor. 3. As the wage rate rises, the marginal revenue product of labor increases. 4. f labor and capital are complements in production, additions to capital will increase both the total and marginal products of labor. 5. When two factors are substitutes in production, an increase in the employment of one increases the marginal product of the other.
The rights of an owner to use and exchange property are
A) capitalist rights. B) socialist rights. C) property rights. D) money rights.
Which term refers to a legally established minimum price that firms may charge?
A) a tariff B) a price ceiling C) a subsidy D) a price floor
Which of the following faces a horizontal demand curve?
a. A monopolistic firm b. An oligopolistic firm c. A perfectly competitive firm d. A monopolistically competitive firm e. A monopsonist firm