Question Part 1 of 2 – Lesson 6 Questions 45.0/ 50.0 Points Question 1 of 40 2.5/ 2.5 Points Richard works for a firm that is expanding into a completely new line of business. He has been asked to determine an appropriate Weighted Average Cost of Capital (WACC) for an average-risk project in the expansion […]

Draw a supply and demand graph to illustrate the problem described in the case study, and prescribe your own solution. Which proposal do you think best serves the interests of small dairy farmers? Why?

Which of the following is a property of a public good? a. A public good is free from externalities. b. Many individuals benefit simultaneously. c. A public good is not subject to free riders. d. A public good is established by law.

T F It’s difficult for a private firm to provide a public good because of free riders. Suppose prices for new homes have risen, yet the number of new homes sold has also risen. We can conclude that a. the demand for new homes has risen. b. the law of demand has been violated. c.

If water is essential for life, while diamonds are not, then why is water cheaper than diamonds? a. Because most people would rather die with a big diamond ring than live without one. b. Because the total utility generated by diamonds is larger than the total utility generated by water. c. Because most people do

Consider a consumer who spends all income on onlytwo goods: bread and wine. An extra loaf of bread would give the consumer 10 extra utils, while an extra bottle of wine would give the consumer 60 extra utils. Bread costs 50 cents per loaf, and wine costs $6 per bottle. In this situation, the consumer

As an individual consumes more of a given good, the marginal utility of that good to the consumer a. rises at an increasing rate. b. rises at a decreasing rate. c. falls. d. rises.

 The amount of added utility that a consumer gains from the consumption of one more unit of a good is called a. incremental utility. b. total utility. c. diminishing utility. d. marginal utility.

A certain consumer buys only food and compact discs. If the quantity of food bought increases, while that of compact discs remains the same, the marginal utility of food will a. fall relative to the marginal utility of compact discs.        b. rise relative to the marginal utility of compact discs. c. rise, but not as

The slope of the indifference curve for goods X and Y is called the marginal a. product rate. b. rate of transformation. c. rate of substitution. d. rate of utility.