To make a rational choice, a person
A) adds the total costs to determine if the total is small enough.
B) adds the total benefits and the total costs and then compares the two totals.
C) takes account of all benefits and all opportunity costs, including both marginal costs and sunk costs.
D) adds the total benefits to determine if the total is large enough.
E) compares the extra benefits of one more unit to the extra costs of one more unit.
E
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A drop in the demand for soybean meal in China would
A. decrease the total demand for soybeans. B. decrease the price of soybeans. C. increase the quantity of soybeans. D. Both A and B are correct.
Which of the following best describes the law of diminishing marginal returns?
a. When more and more of a variable resource is added to a given amount of a fixed resource, the resulting change in output will eventually diminish and could become negative. b. The notion that as a person consumes more and more of a good, such as 12 ounce cups of lemonade, the marginal utility from each additional cup will tend to decline. c. The empirical fact that positive economic profits will tend to decline over time as new firms attracted by the extra-normal profit opportunity enter the market. d. When more and more capital per labor is used in production, the marginal product of labor eventually declines and could become negative.