Economists believe the Cost-Benefit Principle is:
A. a simple but useful model of how people should make choices.
B. an interesting intellectual exercise with little applicability to the real world.
C. of little use to those who wish to learn how to make better decisions.
D. a comprehensive description all the factors that influence people's choices.
Answer: A
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Suppose a profit-maximizing monopolist faces a constant marginal cost of $20, produces an output level of 100 units, and charges a price of $50 . The socially efficient level of output is 200 units. Assume that the demand curve and marginal revenue curve are the typical downward-sloping straight lines. The monopoly deadweight loss equals $1,500
a. True b. False Indicate whether the statement is true or false
Mauritius, an island off the coast of Africa, competes with other countries producing goods with low-skilled labor. In 2006, it was reported that its "...factories have been exposed to ... competition from China, India, and other Asian mass producers." As a result, "the main export industry has seen a 30% reduction in volume..." The story describes:
a) a decrease in autonomous expenditure b) a decrease in induced expenditure c) an unplanned decrease in inventories d) an increase in equilibrium expenditure
Taxable income is:
A. total income less deductions and exemptions. B. the same as gross income. C. the only income to which marginal tax rates apply. D. the sum of all wage and property income.
Figure 9.4 represents the market for used 12 megapixel digital cameras. Suppose buyers are willing to pay $400 for a plum (high-quality) used digital camera and $200 for a lemon (low-quality) used digital camera. If buyers believe that all of used digital cameras in the market are lemons (low quality), what number of used digital cameras sold will actually be lemons?
A. 50 B. 60 C. 110 D. 150