Economists should consider ________ when evaluating options
A) only explicit costs and benefits
B) only implicit costs and benefits
C) both explicit and implicit costs and benefits
D) neither explicit nor implicit costs and benefits
C
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If land suitable for growing corn is also suitable for growing soybeans, and soybeans were found to prevent cancer,
A) the demand for corn would decrease. B) there would be no effect on the cost of growing corn. C) the supply (curve) of soybeans would increase. D) the cost of growing corn would rise. E) the cost of growing corn would fall.
According to the Coase theorem, part of what is needed for private transactions to be efficient is that property rights
A) must be defined, but it does not matter who owns the property. B) must be defined, and it is crucial as to who owns the property. C) need not be defined as long as there are no transactions costs present. D) need to be defined by the government to avoid producers from exploiting high transactions costs.
Marginal utility theory predicts that an increase in income means that the consumption of
A) all goods will increase. B) normal goods will increase and consumption of inferior goods will decrease. C) inferior goods will increase and consumption of normal goods will decrease. D) None of the above answers is correct.
In a perfectly competitive industry, the firm's marginal revenue curve is
A) downward sloping. B) upward sloping. C) vertical. D) horizontal.