ECO101H1 Lecture 2: Lecture 2-The Economic Way of Thinking

2. Eric Shabby is sitting in a restaurant eating cans of Spam. The cans of Spam cost $1.00 each. According to the economic decision rule, Eric will stop eating Spam when the a marginal benefit to him of an additional can of Spam is less than $1.00. b. marginal cost to him of an additional can of Spam is less than the marginal benefit. c. marginal cost to him of an additional can of Spam is greater than $1.00. d marginal benefit to him of an additional can of Spam is greater than $1.00.

A profit-maximizing monopolist will continue expanding output as long as:

a. marginal revenue exceeds marginal cost.
b. marginal revenue is positive.
c. the cost of producing an additional unit exceeds the marginal revenue derived from the unit.
d. economic profit is more than zero.

A profit-maximizing monopolist will continue expanding output as long as:

a. marginal revenue exceeds marginal cost.
b. marginal revenue is positive.
c. the cost of producing an additional unit exceeds the marginal revenue derived from the unit.
d. economic profit is more than zero.