"Water is very inexpensive. Thus the marginal and total utility of water is small." Analyze the previous statements
What will be an ideal response?
Parts of the statement are true but a key part is false. Water is, indeed, very inexpensive and so its marginal utility is small. Because water is so inexpensive, the quantity people buy is large, which is why its marginal utility is small. However, water is essential to life. Hence the total utility of water is immense.
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A perfectly competitive firm should hire additional units of labor in a competitive labor market if
a. marginal revenue is less than marginal cost b. the marginal revenue product exceeds the wage rate c. total revenue exceeds total cost d. the marginal product of labor exceeds the wage rate e. the marginal product of labor is less than the wage rate
Land used to grow corn could also be used to grow soybeans. Which of the following is true when the farmer plants soybeans and the market price of corn rises?
a. The opportunity cost of producing soybeans decreases. b. The opportunity cost of producing soybeans increases. c. There will be no change in the opportunity cost of producing soybeans. d. The opportunity cost of producing corn increases.