The general rule for allocating productive resources efficiently across different production activities of the same product, like the fishing boats in the textbook example, is to choose the allocation for which the:
a. average product of the resource is the same in every activity
b. marginal product of the resource is the same in every activity
c. total product of the resource is the same in every activity
d. average product is equal to the marginal product
e. none fo the above
Ans: b. marginal product of the resource is the same in every activity
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Refer to Figure 17-3. Assume Panel B represents the labor supply curve. Which of the following statements about Panel B is true?
A) Panel B describes a situation in which the income effect dominates the substitution effect at every level of wages (segments i, ii, and iii). B) Panel B describes a situation in which the income effect dominates the substitution effect at low wages (segment i) and a situation in which the substitution effect dominates the income effect at very high wages (segment iii). C) Panel B describes a situation in which the income effect dominates the substitution effect at low wages (segment i) and again at very high wages (segment iii). D) Panel B describes a situation in which the substitution effect dominates the income effect at low wages (segment i).
Inflation is the: a. the value of goods and services produced in an economy in a given period of time. b. is the value of goods and services imported by an economy in a given period of time. c. general and ongoing rise in the price level of an economy
d. general and ongoing fall in the price level of an economy.