10 Questions
Teresa eats three oranges during a particular day. The marginal benefit she enjoys from eating the third orange
can be thought of as the total benefit Teresa enjoys by eating three oranges minus the total benefit she would have enjoyed by eating just the first two oranges.
The average cost per seat on the 50-passenger Floating-On-Air Bus company's trip from Kansas City to St. Louis, on which no refreshments are served, is $45. In advance of a particular trip, three seats remain unsold. The bus company could increase its profit only if it
charged any ticket price above $0 for the three remaining seats.
A construction company has built 50 houses so far this year at a total cost to the company of $8 million. If the company builds a 51st house, its total cost will increase to $8.18 million. Which of the following statements is correct?
All of the above are correct.
People are willing to pay more for a diamond than for a bottle of water because
the marginal benefit of an extra diamond far exceeds the marginal benefit of an extra bottle of water.
Evidence indicates that seat belt laws have led to
fewer deaths per automobile accident.
Based on the available evidence, which of the following groups benefits most from mandatory seat belt laws?
owners of collision-repair shops
In the former Soviet Union, producers were paid for meeting output targets, not for selling products. Under those circumstances, what were the economic incentives for producers?
to produce enough to meet the output target, without regard for quality or cost
The principle that "trade can make everyone better off" applies to interactions and trade between
All of the above are correct.
Benefits from trade would not include
less competition.
Which of the following statements does not apply to a market economy?
Government policies are the primary forces that guide the decisions of firms and households.
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