The rule for the optimal use of any input says that
A. when MRP is less than price, it pays to expand resource use.
B. when MRP is greater than price, it pays to expand resource use.
C. when MRP equals price, resource use should be cut back.
D. resources should be used only if MRP exceeds price.
Answer: B
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In John Rawls’ A Theory of Justice, people choose the rules for distributing income from behind a veil of ignorance. People understand that ability determines income, but they do not know their abilities or the abilities of others. Rawls argues that people are risk averse and will choose the distribution rule that maximizes their income in the worst-case scenario (they have relatively little ability). An economist would call this strategy
A. minimax. B. maximin. C. irrational. D. tacit collusion.
The goals of charitable organizations are inevitably inconsistent with the principles associated with profit maximization
Indicate whether the statement is true or false
Which of the following is correct? Price controls
a. always help those they are designed to help. b. never help those they are designed to help. c. often hurt those they are designed to help. d. always hurt those they are designed to help.
Economists normally assume people's preferences should be
a. respected. b. adjusted. c. overruled. d. ignored.