If water is essential for life, while diamonds are not, then why is water cheaper than diamonds?
a. Because most people would rather die with a big diamond ring than live without one.
b. Because the total utility generated by diamonds is larger than the total utility generated by water.
c. Because most people do not understand their total need for water.
d. Because water is abundant, the marginal utility of water is low, and price reflects marginal utility, not total utility.
d
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An increase in the price of grape juice causes an increase in the marginal revenue product of labor used to produce grape juice
Indicate whether the statement is true or false
If the government wanted to efficiently limit the emission of Carbon Monoxide by all firms to exactly four million tons it could
A) issue rights to pollute worth four million tons and let the firms trade those rights in a market. B) appeal to firms' environmental conscience to pollute less. C) subsidize production. D) rely on the Coase Theorem.
If a country has the comparative advantage in producing a product, then that country must also have the absolute advantage in producing that product
a. True b. False Indicate whether the statement is true or false
The origin of classical economics was based on the book written by
A. John Maynard Keynes. B. Milton Friedman. C. Karl Marx. D. Adam Smith.