"Essential" water is cheaper than "nonessential" diamonds because:
A. new industrial uses for diamonds have been discovered.
B. the supply of water is great relative to demand and the supply of diamonds is small relative to demand.
C. although the total utility of diamonds is greater, their marginal utility is small.
D. the supply of diamonds is great relative to demand and the supply of water is small relative to demand.
Answer: B. the supply of water is great relative to demand and the supply of diamonds is small relative to demand.
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In perfect competition, restrictions on entry into an market
A) apply to both capital and labor. B) apply to labor but not to capital. C) apply to capital but not to labor. D) do not exist.
Sue has human capital worth $500,000 and nonhuman capital of $100,000. Todd has human capital worth $10,000 and nonhuman capital of $50,000. The return on each type of capital is 10 percent a year
Sue's income is ________ and Todd's income is ________. A) $10,000; $5,000 B) $50,000; $1,000 C) $600,000; $60,000 D) $60,000; $6,000