What is meant by the statement that "optimal decisions are made at the margin"?
What will be an ideal response?
In economics, the word "marginal" means "extra" or "additional." Economists reason that the optimal decision is to continue any activity up to the point where the marginal benefit equals the marginal cost, so optimal decisions are made at the point where the extra benefit received from an activity is equal to the extra cost associated with that activity.
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The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B B. recessionary; C C. recessionary; A D. expansionary; A
Innovation typically increases when
A) high taxes are present. B) the legal system is weak. C) government controls the resource base. D) market incentives and private property rights are encouraged.
Refer to Table 20.2. Is the tax system represented in the table progressive, regressive, or neither one? How can you tell?
What will be an ideal response?
Which of the following is not considered a factor that contributes to economic growth?
a. increased labor productivity b. increased infant mortality rates c. technological advances d. the migration of resources from areas of low productivity to areas of high productivity