a. trade can make everyone better off.
b. people face trade-offs
c. rational people think at the margin.
d. decisions made at the margin are not particularly important.
a. is more efficient and more equal for society.
b. is more efficient but less equal for society
c. is more equal but less efficient for society.
d. is less equal and less efficient for society.
a. the value to Barb of the option she would have chosen had Option B not been available
b. the value to Barb of Options A, C and D combined.
c. the average of the values to Barb of Options A, C, and D.
a. He should sell the car now for $3800.
b. He should keep the car since it wouldn’t be rational to spend $6400 restoring a car and then sell it for only $6200.
c. He should complete the additional work and sell the car for $6200.
d. It does not matter if Bill sells the car now or completes the work and then sells it at the higher price because the outcome will be the same either way.
d. This cannot be determined from the information given.
a. the benefits from eating all three bowls of ice cream to how much three bowls of ice cream costs.
b. the benefits from eating all three bowls of ice cream to how much one more bowl of ice cream costs.
c. the benefits from eating one more bowl of ice cream to how much three bowls of ice cream costs.
d. the benefits from eating one more bowl of ice cream to how much one more bowl of ice cream costs.
a. People respond to incentives.
b. Rational people think at the margin.
c. Trade can make everyone better off.
d. Markets are usually a good way to organize economic activity.
a. only with nations that can produce goods England cannot produce.
b. only with less developed nations.
c. only with nations outside of Europe.
d. with any nation.
a. the value of a good to society, but not the cost of making it.
b. the cost of making a good to society, but not its value.
c. both the value of a good to society and the cost of making it.
d. neither the value of a good to society nor the cost of making it.
a. the basic benevolence of society.
b. society’s legal system.
c. individuals’ pursuit of self-interest.
d. partnerships that are forged between business and government.
a. a market failure caused by an externality
b. a market failure caused by market power.
c. a market failure caused by equality.
d. There is no market failure in this case.
a. most economies’ production methods are not very good.
b. in most economies, wealthy people consume disproportionate quantities of goods and services.
c. governments restrict production of too many goods and services.
d. resources are limited.
a. durable and nondurable goods
b. imports and exports
c. national defense and consumer goods
d. law enforcement and agriculture
a. can be thought of as the total benefit Ashley enjoys by eating two bananas minus the total benefit she would have enjoyed by eating just the first banana.
b. determines Ashley’s marginal cost of the first and second bananas.
c. does not depend on how many bananas Ashley has already eaten.
d. cannot be determined unless we know how much she paid for the bananas.
a. People face tradeoffs.
b. The cost of something is what you give up to get it.
c. Rational people think at the margin.
d. People respond to incentives.
a.Yemen will benefit, but trade with a less developed country could not benefit the United States.
b.it will not benefit Yemen because workers in the United States are more productive.
c.Yemen and the United States can both benefit.
d.it will not benefit either country because their cultural differences are too vast.
a.markets sometimes fail to produce a fair distribution of economic well-being.
b.markets sometimes fail to produce an efficient allocation of resources.
c.property rights have to be enforced.
d.All of the above are correct.
c.firms and households
a. how society manages its scarce resources.
b. how to run a business most profitably.
c. how to predict inflation, unemployment, and stock prices.
d. how the government can stop the harm from unchecked self-interest.