When the marginal cost of producing a bike is greater than the marginal benefit of the bike, for resource use to be allocatively efficient,
A) more bikes should be produced.
B) fewer bikes should be produced.
C) no more and no fewer bikes should be produced.
D) it must be determined if the production of bikes can be increased.
E) people must be educated to demand more bikes.
B
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The deposit expansion multiplier would increase if the Fed were to
A) raise the required reserve ratio. B) lower the required reserve ratio. C) raise the discount rate. D) sell bonds.
Johnny has allocated $30 toward coffee and tea and feels that coffee and tea are perfect substitutes. Due to differences in caffeine levels, his MRS of tea for coffee equals two. If coffee and tea sell for the same price, Johnny will
A) spend all $30 on tea. B) spend all $30 on coffee. C) spend $20 on coffee and $10 on tea. D) be indifferent between any bundle of coffee and tea costing $30.
If the price elasticity of demand for shelled, roasted, unsalted peanuts is 0.86 at current prices, a small increase in price will raise producers' total revenue
Indicate whether the statement is true or false
Which of the following statements is correct?
a. For all firms, marginal revenue equals the price of the good. b. Only for competitive firms does average revenue equal the price of the good. c. Marginal revenue can be calculated as total revenue divided by the quantity sold. d. Only for competitive firms does average revenue equal marginal revenue.