Answer the following statement(s) true (T) or false (F)
1. Cost-effectiveness requires that resources are allocated such that the additional benefits to society are equal to the additional costs.
2. Assume that the marginal revenue associated with the 12th unit of output is $25 and the marginal cost is $14. As a result, the firm should produce more, because the marginal profit at that output level is greater than zero.
3. When a profit-maximizing firm increases output to Q = 50, its MR= $100 and MC = $124, meaning that total profitfalls by $24, so the firm should contract production.
4. In perfect competition, the firm faces a perfectly inelastic demand.
5. The demand faced by the perfectly competitive firm is perfectly elastic, meaning that price and marginal revenue are equal.
1. False
2. True
3. True
4. False
5. True
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Which of the following is true?
a. economic freedom is present if a country is a political democracy. b. economic freedom ratings indicate the consistency of a nation's institutions and policies with personal choice, freedom of exchange, and protection of private property. c. economies that are highly free tend to grow less rapidly than those with less economic freedom. d. all of the above are correct.
A firm facing a ________ demand curve, ceteris paribus, will have zero quantity demanded if it raises its price above the market price.
A. perfectly elastic B. relatively inelastic C. perfectly inelastic D. relatively elastic
In the law of torts, what is meant by a negligence standard? How does a negligence standard promote economic efficiency? How can it lead to less-than-efficient outcomes?
What will be an ideal response?
People who buy futures on the commodity market are
A) increasing, not reducing, their personal risk. B) reducing, not increasing, their personal risk. C) either reducing or increasing their personal risk, depending on the circumstances. D) creating added risk for others in society. E) showing they are essentially indifferent to risk.