When society overallocates resources to a product it means that the:
A. marginal benefit is less than the marginal cost.
B. opportunity cost of the product is decreasing.
C. investment in the product is declining.
D. marginal benefit is greater than the marginal cost.
Answer: A
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All of the following, except one, are included in the profit earned by a firm's owners. Which is the exception?
a. the reward for developing new products b. the reward for moving an established business into new geographic markets c. the reward for risk taking d. salaries that compensate for the owners' time e. dividend payments to the stockholders
Adam Smith's behavioral assumption about humans was that people
A) typically act irrationally. B) usually act in a rational, self-interested way. C) are consistently greedy. D) typically act randomly.