True OR False
1)Marginal cost is the additional cost incurred in undertaking an activity?
2)The "invisible hand" is the price mechanism that guides our actions in the market.
3)When individuals trade, using their comparative advantages, the production possibility curve does not change?
4)A quota is a tax on an imported product.
5)Demand refers to a schedule of quantities of a good while Quantity demanded refers to a specific amount of demand?
6)The minimum wage is an example of a price floor.
7)Total utility cannot decline as consumption rises.
8)The cross-price elasticity of demand is positive for substitutes and negative for complements.
Take a shot, what do you think. Be sure to do a little research first (i.e., read your econ text).
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1) True. Marginal cost refers to the additional cost that is incurred when producing one additional unit of a good or service.
To get this answer, you can refer to any introductory economics textbook or online resource that discusses the concept of marginal cost. The definition and explanation of marginal cost will be provided.
2) True. The "invisible hand" refers to the idea that self-interested individuals, in their pursuit of maximizing their own well-being, unintentionally promote the overall welfare of the society through the price mechanism in a market.
To get this answer, you can again refer to an economics textbook or online resource that covers the concept of the invisible hand. The explanation of the invisible hand and its connection to the market and individual actions will be provided.
3) False. When individuals trade using their comparative advantages, the production possibility curve can change. Comparative advantage refers to the ability of one individual, firm, or country to produce a good or service at a lower opportunity cost than others. By specializing in producing goods or services in which they have a comparative advantage, individuals can increase their total output and potentially expand the production possibility curve.
To get this answer, you can refer to the concept of comparative advantage and its impact on the production possibility curve in an economics textbook or online resource.
4) False. A quota is a restriction imposed on the quantity of a specific good that can be imported into a country, typically by setting a maximum limit. It is not a tax on an imported product, although it can indirectly affect the price of the imported product.
To get this answer, you can research the definition of quota in an economics dictionary or textbook, or look for reliable online sources that explain the concept of quotas.
5) False. Demand refers to the entire relationship between the price of a good and the quantity demanded at each price. It is represented by a demand curve or schedule that shows the various quantities demanded at different prices. Quantity demanded refers to a specific amount of a good or service that consumers are willing and able to purchase at a particular price.
To get this answer, you can look up the definitions of demand and quantity demanded in an economics textbook or online resource.
6) True. The minimum wage is an example of a price floor, which is a government-imposed minimum price set above the equilibrium price in a market. In the case of the minimum wage, it is the lowest hourly wage rate that an employer can legally pay to workers.
To get this answer, you can study the concepts of price floors and the minimum wage in an economics textbook or online resource.
7) False. Total utility can decline as consumption rises. Total utility refers to the total satisfaction or happiness derived from consuming a certain quantity of a good or service. While initially, as consumption increases, total utility generally increases, there is a point of diminishing marginal utility where each additional unit consumed provides less satisfaction and total utility may start to decline.
To get this answer, you can refer to the concepts of total utility and marginal utility in an economics textbook or online resource.
8) True. The cross-price elasticity of demand measures the responsiveness of the quantity demanded of one good to a change in the price of another good. If the cross-price elasticity is positive, it indicates that the two goods are substitutes, and an increase in the price of one good leads to an increase in the quantity demanded of the other good. If the cross-price elasticity is negative, it indicates that the two goods are complements, and an increase in the price of one good leads to a decrease in the quantity demanded of the other good.
To get this answer, you can research the concept of cross-price elasticity of demand in an economics textbook or online resource.