DeShawn's Detailing is a service that details cars at the customers' homes or places of work. DeShawn's cost for a basic detailing package is $40, and he charges $75 for this service. For a total price of $90, DeShawn will also detail the car's engine, a
service that adds an additional $20 to the total cost of the package. What is DeShawn's marginal benefit if he sells a basic detailing package?
A) $35
B) $75
C) He makes a marginal loss of $15, not a marginal benefit.
D) The marginal benefit cannot be determined.
Answer: B
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When real GDP equals potential GDP, the quantity theory of money says that an increase in the quantity of money brings an equal percentage
A) decrease in real GDP. B) decrease in velocity. C) decrease in the price level. D) increase in the price level. E) increase in real GDP.
The substitution effect of a change in wage rate on a firm's demand for labor input will be more significant:
a. the greater the change in output. b. the more sharply curved are the firm's isoquants. c. the flatter are the firm's isoquants. d. the larger the quantity of labor employed.
The demand for most agricultural products tends to be
a. both price and income elastic b. both price and income inelastic c. price inelastic and income elastic d. price elastic and income inelastic e. unit elastic in terms of price elasticity and income elastic
Objections to free trade
a. often come from those who are harmed by trade b. make no sense because everyone benefits from trade c. usually arise outside of the United States d. are not economically rational e. reflect a lack of understanding of the benefits of international trade