How do people maximize net gains from the decisions they make?
a. by choosing to participate only in activities with increasing marginal benefits
b. by choosing to participate only in activities without costs
c. by pursuing an activity until marginal cost equals marginal benefit
d. by including sunk costs as a relevant cost in all decisions
Ans: c. by pursuing an activity until marginal cost equals marginal benefit
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An increase in the expected future price of inputs will cause:
A. the short-run aggregate supply curve to shift to the left. B. the aggregate demand curve to shift to the right. C. a movement rightward along the short-run aggregate supply curve. D. the long-run aggregate supply curve to shift to the left.
A diminishing marginal rate of substitution implies that indifference curves are
A. positively sloped. B. straight lines. C. concave. D. convex.
Refer to Figure 2-1. Harvey receives his first paycheck for working as an ice cream vendor. To which of the arrows does this transaction directly contribute?
a. B only
b. A and B
c. C only
d. C and D
Why is there often resistance to free trade?
A. Free trade does not benefit the economy as a whole. B. Specific groups may be hurt by free trade. C. Free trade usually hurts consumers. D. Free trade does not benefit the global economy.