Answer the following questions true (T) or false (F)
1. The total amount of producer surplus in a market is equal to the area below the supply curve.
2. Marginal cost is the additional cost to a firm of producing one more unit of a good or service.
3. Marginal benefit is the total benefit to a consumer from consuming one more unit of a good or service.
1. FALSE
2. TRUE
3. FALSE
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Which of the following would be considered a fiscal policy action?
A) Spending on the war in Afghanistan is increased to promote homeland security. B) Tax incentives are offered to encourage the purchase of fuel efficient cars. C) A tax cut is designed to stimulate spending during a recession. D) The Fed increases the money supply.
The marginal product of a variable input is calculated as:
A) the change in total product divided by the change in output. B) total product divided by the change in the variable input. C) the change in total product divided by the change in the variable input. D) total product divided by the total quantity of the variable input.