If the marginal benefit of a hot dog is greater than its marginal cost, then to increase efficiency,
A) more hot dogs should be produced.
B) fewer hot dogs should be produced.
C) nothing should be done if the marginal benefit is greater than the marginal cost by the maximum amount because in this case the efficient quantity of hot dogs is being produced.
D) production should be halted.
E) More information is needed about the price of a hot dog in order to determine if production should be increased, decreased, or not changed.
A
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When a low-income nation improves its institutions, so that growth results, one reason the growth may be more rapid than would result from a similar improvement in a developed nation that brings the same amount of added capital per worker to each nation, is that
a. adding capital has constant returns to scale, rather than diminishing returns, in each nation. b. with diminishing returns to scale, and with richer nations starting with more capital per unit labor, the added capital produces smaller increments to production in the higher-income nations. c. wage rates are lower in the low-income nation, and lower-income workers are more productive. d. capital is always more productive in lower-income nations.
Assume that the expectation of a recession next year causes business investments and household consumption to fall, as well as the financing to support it. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the quantity of real loanable funds per time period and the nominal value of the domestic currency in the context of the
Three-Sector-Model? a. The quantity of real loanable funds per time period rises and nominal value of the domestic currency falls. b. The quantity of real loanable funds per time period falls and nominal value of the domestic currency remains the same. c. The quantity of real loanable funds per time period rises and nominal value of the domestic currency remains the same. d. The quantity of real loanable funds per time period falls and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.