The cost of using an additional unit of an input is called the
A) marginal revenue product.
B) marginal physical product cost.
C) marginal factor cost.
D) marginal product of labor.
Answer: C
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The buyer of a futures contract
A) assumes the short position. B) has the obligation to deliver the underlying financial instrument at the specified date. C) has the obligation to receive the underlying financial instrument at the specified future date. D) may, at his or her option, deliver or receive the underlying financial instrument at the specified date.
A friend tells you he is studying the incidence of the corporate income tax. What is the subject of his study?
A) how frequently corporations should be taxed B) how inflation affects the amount of tax revenue collected from firms C) how corporations can aid the government in collecting delinquent taxes D) how the burden of corporate taxation is distributed among stockholders, employees, and consumers
Some environmentalists have criticized tradable emission allowances on the grounds that they give permit holders a license to pollute. Furthermore, environmentalists argue that those who sell their permits receive a monetary benefit from their
contribution to polluting the environment. Use economic reasoning to evaluate this criticism. What will be an ideal response?
When external costs exist,
A. Market prices do not convey the full costs of production. B. Private costs are greater than social costs. C. There is government failure. D. The market achieves the optimal mix of output.