Which is the best example of specialization?
A) a high school math teacher who teaches only calculus
B) a firm that produces both luggage and cooking oil
C) a person whose job includes accounting, personnel, and maintenance tasks
D) a high school math teacher who teaches algebra and calculus
A
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Because of the positive externality of vaccinations, economic efficiency would be improved
A) if more people were vaccinated. B) only if no people were vaccinated. C) only if all people were vaccinated. D) if fewer people were vaccinated.
A profit-maximizing firm will continue to expand output:
A. as long as the revenues from the production and sale of an additional unit exceeds the average cost of the unit. B. until the average cost of producing the good or service is at a minimum. C. as long as the revenues from the production and sale of an additional unit exceeds the marginal cost of the unit. D. until the marginal cost of producing a good or service is at a minimum.
Answer the following statements true (T) or false (F)
1. The free-rider problem makes a good highly profitable for a private firm to provide. 2. The free-rider problem refers to the local government's problem of finding funds to subsidize public transportation. 3. Rivalry means that when one person buys and consumes a product, it is not available for purchase and consumption by another person. 4. The government receives all of the benefits associated with the production of a public good.
A wheat farmer sells wheat in a perfectly competitive market and hires labor in a perfectly competitive market. The market price of wheat is $2 a bushel, the wage rate is $10, the farmer employs five workers and the marginal product of the fifth worker is 10 bushels. What would you advise this farmer to do?
A. Do nothing because the wage rate and the marginal product of the last worker hired are equal. B. Increase employment because the wage paid is less than the marginal revenue product. C. Reduce the product price so that the wage and marginal revenue product will be equal. D. Reduce employment because the wage paid is less than the marginal revenue product.