Voluntary trade promotes economic progress because it
a. moves goods, services and resources from people who value them more to individuals who value them less.
a. moves goods, services and resources from people who value them more to individuals who value them less.
b. encourages individuals to become self-sufficient.
c. makes larger outputs possible as a result of specialization.
d. benefits buyers at the expense of sellers.
c. makes larger outputs possible as a result of specialization.
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Your classmates from the University of Chicago are planning to go to Miami for spring break, and you are undecided about whether you should go with them. The round-trip airfares are $600, but you have a frequent-flyer coupon worth $500 that you could use to pay part of the airfare. All other costs for the vacation are exactly $900. The most you would be willing to pay for the trip is $1400. Your only alternative use for your frequent-flyer coupon is for your trip to Atlanta two weeks after the break to attend your sister's graduation, which your parents are forcing you to attend. The Chicago-Atlanta round-trip airfares are $450. If you do not use the frequent-flyer coupon to fly to Miami, should you go to Miami?
A. Yes, your benefit is equal to your cost. B. Yes, your benefit is more than your cost. C. No, your benefit is less than your cost. D. No, because there are no benefits in the trip.
Why do economies of scale and monopoly power exist with network goods?
A. Many small firms must develop to serve all of the consumers willing to pay for access to the network good, so their costs are driven down. B. Network goods require a group of sellers working together and this cooperation reduces the firms' cost per unit. C. Just as the value of a network good decreases to each user as the total number of users increases, so does the long run average cost decrease as output increases. D. As the number of people connected to a network increases, the greater the benefits each person gets and the smaller the cost per unit to supply.
The marginal revenue product
A. gives the increase in cost when there is an increase in a variable input. B. always increases when there is an increase in a variable input. C. gives the change in total product when an additional unit of a good is hired. D. represents the incremental contribution to the firm's total revenues obtained from an increase in a variable input.
Airlines are __________ than they were before deregulation
a. more dangerous b. more concentrated c. higher priced d. flying fewer miles e. much more profitable