Is the marginal benefit someone enjoys from a good or service the same as the price he or she pays? Explain your answer
What will be an ideal response?
Generally the marginal benefit of a good or service is different than the price that is paid. The marginal benefit is the maximum amount a consumer is willing to pay for a good or service. Typically the consumer can buy the good or service for a price less than the maximum. Indeed, the difference between the marginal benefit (the maximum price the consumer is willing to pay) and the price actually paid is the consumer surplus.) However, it might be the case that the price precisely equals the marginal benefit, that is, equals the maximum the consumer is willing to pay. In this case alone, the marginal benefit equals the price. And in this case, the amount of the consumer surplus equals zero.
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If Ep is 3500 and Y is 3000, then companies will
A) reduce orders and production by 500. B) increase orders and production by 500. C) wait for final sales to increase but continue to produce at existing level in the future. D) wait for final sales to decrease but reduce the level of production in the future.
One consequence of unemployment is that:
A. some productive potential of the economy is being wasted. B. the time and skills of the unemployed are not being put to use. C. it can create uncertainty about the future. D. All of these are consequences of unemployment.
Hospitals announce that there are not enough nurses available to keep them fully staffed. Economically speaking, what does this announcement mean?
A) The market wage for trained nurses is currently above the equilibrium wage. B) There is currently a surplus of nurses in this market. C) The market wage for nurses will eventually rise to the market clearing wage. D) The market will adjust very rapidly to correct this imbalance because anyone can be a nurse without any training.
Karen holds a $100 bond that pays $10 per year in interest. The minimum price Karen would have to be offered before she would sell the bond:
A. is $110. B. is $125. C. is $140. D. depends on rates of return she could earn on other, similar investments.