The demand curve is the same as another curve. Which curve is the same as the demand curve? Why are the curves the same?
What will be an ideal response?
The demand curve is the same as the marginal benefit curve. For any quantity, the demand curve shows the dollar value of other goods and services the consumer is willing to forgo to get another unit of the good. (This amount is the maximum price the consumer is willing to pay and equals the price from the demand curve vertically above each quantity.) But the amount of other goods and services the consumer is willing to forgo is the marginal benefit of the good. Hence along the demand curve the price associated with each quantity of the good is the same as the marginal benefit of that quantity. (So that, for instance, the price associated with the 3rd quantity is the same as the marginal benefit of the 3rd unit.) Therefore the demand curve is the same as the marginal benefit curve.
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Briefly explain the command-and-control approach in dealing with an externality such as pollution. Give an example of the U.S. government using the command-and-control approach to deal with the pollution problem
What will be an ideal response?
Diminishing marginal product of labor occurs when adding another unit of labor
A) increases output by an amount larger than the output added by the previous unit of labor. B) decreases output by an amount smaller than the output added by the previous unit of labor. C) changes output by an amount smaller than the output added by the previous unit of labor. D) decreases output.