A Piece of Wood Is Floating in a Bathtub

question 19

Multiple Choice

A piece of wood is floating in a bathtub.A second piece of wood sits on top of the first piece,and does not touch the water.If the top piece is taken off and placed in the water,what happens to the water level in the tub?

• A)It goes up.
• B)It goes down.
• C)It does not change.
• D)It cannot be determined without knowing the volumes of the two pieces of wood.

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Definitions:

Marginal Revenue

The additional income received for selling one more unit of a good or service.

Profit-Maximizing Output

The level of production at which a company can achieve the maximum difference between total revenue and total costs, leading to the highest possible profit.

Market Price

The present cost at which a product or service is available for purchase or sale in the market.

Economic Profit

The total revenue of a business minus its explicit and implicit costs; represents additional wealth created by a company over and above its costs.