"I Have Been Making Furniture for 27 Years

question 398

Multiple Choice

"I have been making furniture for 27 years. I have never heard of either marginal cost or marginal revenue. Fancy economic theories mean nothing to me. I just know how to do well in business. Whenever I can sell something for more than it cost me to produce it, I make it, and whenever I can't sell it for enough to cover my cost, I don't. That's how I stay in business and earn income for my family. Common sense and watching the market are good enough for me." For producers like this, economic models

• A) accurately describe their behavior and allow predictions to be made as to how they will respond to changes in market conditions.
• B) indicate nothing about the behavior of such producers.
• C) will generally only apply if the person has a college education.
• D) do not apply because the producers do not understand the terminology.

---

Definitions:

Joint Tenants

Two or more persons who own property where the right of any deceased owner is automatically transferred to other surviving owners.

Levy

The act of legally seizing property to satisfy a debt or fulfill a judgment, often conducted by a governmental authority.

Tenant in Common

A tenant in common is an individual who co-owns property with one or more persons, where each owner possesses an undivided interest and no right of survivorship exists among the owners.

Tenancy by the Entirety

A form of joint property ownership available only to married couples where both own the entire property equally and rights of survivorship apply.