Jan23 - I-Clicker Questions 1) The optimal or economically...

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I-Clicker Questions 1) The optimal or economically efficient amount of any good, service, or activity is the amount at which marginal benefit equals marginal cost. 2) Which of the following is true of the optimal or economically efficient amount of a good or activity? The difference between total benefit and total cost is net benefit/net income. Net benefit is maximized where marginal benefit = marginal cost. The additional benefit from a small change in the amount of the activity equals the additional cost. 3) According to the basic economic decision rule, the economically efficient crime rate is the rate at which the additional benefits from a small decrease in the crime rate are just equal to the additional cost of crime prevention. 4) Is this a valid use of the economic concept of cost (that is, opportunity cost)? “The cost of the George Strait boxed set at Circuit City is $36.95.” Not valid, $36.95 is not the opportunity cost. Opportunity cost is the value of the most valued item given up, not the physical price in dollars. 5)
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This note was uploaded on 03/15/2012 for the course ECO 2023 taught by Professor Mccaleb during the Spring '08 term at FSU.

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Jan23 - I-Clicker Questions 1) The optimal or economically...

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