From an economic perspective, when a consumer decides to buy more life insurance, the consumer has most likely concluded that the:
A. Marginal cost of more insurance coverage is negative
B. Marginal benefit of more insurance coverage is greater than zero
C. Marginal benefit of more insurance coverage is greater than the marginal cost
D. Marginal cost of more insurance coverage is equal to the payment for the extra coverage
Answer: C
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After the Civil War, many Southern farmers fell into a long-run spiral of debt caused by
a. the monopoly power of country stores. b. the monopoly power of railroads. c. excessive interest rates charged by banks. d. carpetbaggers.
Suppose that the only maker of a particular type of horse hair clothing exits the industry because demand is too low. The correct analysis of this situation is that
a. the producer's decision is irrational, since monopolies are not limited by the demand curve b. the producer's decision is irrational, since monopolies never go out of business c. the producer's decision is irrational, since it could simply raise the price d. the price received by the producer was lower than the marginal cost in the long run e. the price received by the producer was lower than the average total cost in the long run