Basing decisions on marginal cost and marginal benefit means that people should:
A. take no chances.
B. weigh the costs and benefits and make the choice that provides the highest net cost.
C. weigh the costs and benefits and make the choice that provides the highest net benefit.
D. make only Pareto optimal choices.
Answer: C
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An economist says: "The demand curve has two interpretations." What does the economist mean?
What will be an ideal response?
________ countries tend to depend on tariffs for a relatively large part of their government revenue
A) Developed B) Developing C) All
If a business firm is not operating at the point where MR = MC, then:
a. it should shut down. b. it will incur losses. c. it cannot be earning a profit. d. its profit is zero. e. it is not earning the maximum potential profit.
Suppose a production possibilities frontier (PPF) has been plotted on a graph. If the horizontal axis of the graph measures the output of capital goods and the vertical axis measures the output of consumer goods, then a point outside the PPF represents: a. a smaller quantity of consumer goods than that represented by a point inside the PPF. b. an inefficient output combination of the two goods
in the economy. c. an unattainable output combination of the two goods in the economy. d. an output combination of more consumer goods than capital goods. e. a smaller quantity of capital goods than that represented by a point inside the PPF.