Economic inefficiency exists when
A) P = MR.
B) P = MC.
C) MR = MC.
D) P > MC.
D
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A change in inflation leads to shifts of the ________ curves
A) MP, IS, & AD B) MP & IS, but not AD C) IS & AD, but not MP D) MP, but not IS nor AD E) none of the above
A person with no competitive ideas can earn above market average returns at low risk by investing in a diversified portfolio of stocks
Indicate whether the statement is true or false
If the more-is-better principle holds, two different consumption bundles can't be equally attractive unless:
A. they contain the same amounts of each good. B. the consumer is unable to rank both bundles. C. as the consumer gives up some of one good, the consumer is given more of the other good. D. they each cost the same amount to purchase.
Consider a small open economy with desired national saving of Sd = 20 + 200rw and desired investment of Id = 30 - 200rw.Calculate national saving, investment, and the current account balance in equilibrium when the real world interest rate is(a)rw = 0.025.(b)rw = 0.05.(c)rw = 0.0.(d)Now suppose something causes desired national saving to increase by 10, so that it is now Sd = 30 + 200rw. Repeat parts (a), (b), and (c).(e)Suppose, with desired national saving at its original level of Sd = 20 + 200rw, something causes desired investment to rise by 10, to Id = 40 - 200rw. Repeat parts (a), (b), and (c).
What will be an ideal response?