When marginal cost is greater than marginal benefit at the current activity level, the decision maker can increase net benefit by decreasing the activity because
A. net benefit is upward sloping at this point.
B. total cost will fall by more than total benefit will fall.
C. marginal cost is rising faster than marginal benefit is falling.
D. total benefit will rise by more than total cost will rise.
Answer: B
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An investment option is profitable if:
A) its net present value is zero. B) its net present value is positive. C) its net present value is negative. D) its present value is negative
If one observes that Japan was traditionally a net foreign lender, one could conclude that relative to its international trade and financial partners
A) Japan's intertemporal production possibilities are biased toward present consumption. B) Japan's intertemporal production possibilities are biased toward future consumption. C) Japan's intertemporal production possibilities are larger than that of the other countries. D) Japan's intertemporal production possibilities are not biased. E) Japan preferred to consume beyond its production in the present.
If there is a decrease in foreign demand for U.S. goods due to a recession in Europe
A) the U.S. aggregate demand will shift right. B) the U.S. aggregate demand will shift left. C) the U.S. aggregate demand will not be affected. D) the U.S. aggregate demand will become steeper.
Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Country A has the comparative advantage in:
A. cars and Country B has the comparative advantage in trucks.
B. trucks and Country B has the comparative advantage in cars.
C. cars and trucks.
D. neither cars nor trucks.