Graphically, we can think of the marginal product of a factor as the:
A. slope of the total production curve, when output is plotted against the quantity of the input that is used.
B. slope of the total cost curve, when output is plotted against the costs of the quantity of the inputs used.
C. additional cost associated with producing one more unit of output.
D. additional inputs associated with producing one more unit of output.
A. slope of the total production curve, when output is plotted against the quantity of the input that is used.
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Resource use is allocatively efficient when
A) we produce the goods with the highest opportunity cost. B) we produce the goods with the lowest opportunity cost. C) we cannot produce more goods and services. D) we produce the amount of the different goods we value most highly.
An example of adverse selection is a. purchasing a new car sight unseen based on the recommendation of a neighbor. b. high health-insurance premiums resulting from the poor health of people who buy policies
c. suppliers who charge more for better quality clothing than for lower quality clothing. d. being talked into buying a low-quality item because the price is lower.
Economists use the term ceteris paribus to indicate that
a. supply and demand are in balance. b. other things are assumed to be constant. c. the analysis is true for the individual but not for the economy as a whole. d. their conclusions are based on normative economics rather than positive economic analysis.
Using exchange rates based on purchasing power parity to compare per capita incomes in developing and developed countries might lead one to conclude that people in developing countries:
A. are worse off than if market exchange rates are used. B. are no worse off than if market exchange rates are used. C. are better off than if market exchange rates are used. D. do not use markets enough to make such a comparison feasible.