extra credit 1 dsm

The previous table shows the marginal benefit that Ted earns from keeping his store open one more hour. Ted has a marginal cost of $90 per hour. How many hours should Ted stay open?

22 hours

What is the name given to the highest-valued alternative that must be given up to engage in any activity?

Opportunity cost

Marlene decided to close down her retail clothing store and go back to work for a large corporation, even though she was making an accounting profit. Her decision was based on the fact that she would make more money in her old job than she was making in the retail clothing store. Marlene's decision factored in:

The opportunity cost of lost wages from keeping her store open.

When is output lower than the efficient level?

When marginal benefit is greater than marginal cost

When is output higher than the efficient level?

When marginal benefit is less than marginal cost

According to the table of data, when do diminishing returns in the production of pizzas begin?

When the third worker is hired

Social security payments are indexed to inflation so that recipients can;

maintain their purchasing power.

The lowest amount a firm is legally allowed to pay an employee is known as the __________.

minimum wage

Economic variables that are calculated in current year prices are referred to as __________ variables, while variables that have been corrected to account for the effects of inflation are __________ variables.

nominal, real

The principle of opportunity cost evolves from the concept of:

scarcity

The principle of diminishing returns applies;

when at least one input is fixed.