Marginal valuation is:
a. the maximum a person is willing to pay for an additional unit of a good or service.
b. the maximum amount of a good or service a person is willing to consume.
c. the difference between the price an individual is willing to pay for a good or service and its actual price.
d. the difference between the amount of a good or service demanded and that which is available.
A
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If the MPC is 0.6 and there are no imports or income taxes, the multiplier is
A) 6. B) 0.4. C) 2.5. D) 0.6. E) 1.7.
Cross elasticity among goods in a perfectly competitive market is infinite
Indicate whether the statement is true or false
Figure 5-2
illustrates the market for a product that generates an external cost. S1 is the private market supply curve, while S2 is the supply curve including the external cost. Which of the following is true?
a.
Relative to economic efficiency, output of the good will be too large and the price too low.
b.
Relative to economic efficiency, output of the good will be too large and the price too high.
c.
Relative to economic efficiency, output of the good will be too small and the price too low.
d.
Relative to economic efficiency, output of the good will be too small and the price too high.
What are the costs of capital mobility?
What will be an ideal response?