If a positive externality results from the consumption of higher education, then the marginal benefit students receive from education:
a. equals the marginal social benefit
b. is less than the marginal social benefit.
c. includes the marginal external benefit.
d. exceeds the marginal social benefit.
b
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Under the total revenue and total cost approach to profit maximization,
a. firms equate total variable cost to total revenue in order to maximize profit b. profit is maximized when fixed cost falls to zero c. firms choose the level of output at which total revenue is the greatest distance above total cost when the firm earns an economic profit d. firms choose the level of output at which the changes in revenue and cost both equal zero e. total revenue is maximized when profit is zero
Laws that set maximum legal interest rates are called _____.
Fill in the blank(s) with the appropriate word(s).
If consumers can easily switch to a close substitute when the price of a good increases, demand for that good is likely to be:
A. inelastic. B. elastic. C. unit elastic. D. perfectly inelastic.
Answer the following statement true (T) or false (F)
1) In maximizing profit, a firm will always produce that output where total revenues are at a maximum. 2) In the short run, a competitive firm will always choose to shut down if product price is less than the lowest attainable average total cost. 3) A competitive firm will produce in the short run so long as its price exceeds its average fixed cost. 4) The short-run supply curve slopes upward because producers must be compensated for rising marginal costs.