Full marginal-cost pricing of water would lead to
a. More water use and higher water prices
b. Less water use but no change in water prices
c. Less water use and higher water prices
d. Less water use and lower water prices
e. More water use and lower water prices
Answer: c. Less water use and higher water prices
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A corporate executive makes the following statement – "The company must keep hiring more workers up to the point where the marginal productivity of the last worker we hire is zero. This way we can maximize the total productivity of the firm"
Critically evaluate this statement. Also comment on whether this is the correct objective function for the firm.
What is typically the main cost of pursuing a college education?
A) tuition B) room and board C) books and supplies D) income forgone by not working