You can manufacture a product in the US and transfer it to Europe. If the marginal cost (MC) is $3 per unit, and the market price in Europe is $5 per unit, should the product be manufactured?
A. No, because the net receipt of $5 is larger than the MC in the US.
B. No, because the net receipt of $3 is the same as the MC in the US.
C. Yes, because the gross receipt of $3 is larger than the MC in the US.
D. Yes, because the net receipts in Europe will exceed the MC in the US.
Answer: D
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Suppose the working-age population is 500 million, the labor force is 200 million, and the unemployment rate is 15 percent. The number of unemployed people is
A) 30 million. B) 75 million. C) 45 million. D) 105 million. E) 15 million.
Which of the following scenarios describes an action that is not rational from an economic point of view?
A) After drinking one martini (shaken, not stirred), James buys and drinks a second martini even though the marginal benefit of the second martini is lower than the marginal benefit of the first. B) Eric buys a replacement ticket to the basketball game after he realizes that he accidentally left his original ticket at home. C) Emily chooses to attend a social event on Tuesday night instead of studying even though she has an important exam on Wednesday morning. D) US Airways sells a last minute ticket to Don for $50 even though its average cost per passenger is $250. E) None of the above