When technology increases the supply of a good and lower prices increase the quantity demanded,
A) the economy is reallocating resources to achieve an efficient allocation.
B) consumer surplus falls.
C) the invisible hand is unnecessary.
D) the marginal benefit of the good increases with the quantity produced.
E) the economy is no longer efficient because the quantity changes.
A
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In a market, social surplus is maximized if consumers' willingness to pay for the good equals the ________
A) marginal private cost of producing the good B) marginal external cost of producing the good C) marginal social cost of producing the good D) opportunity cost of producing the good
There are two consumers in the market, Jack and Jane. Each have some coffee and candies (coffee on the horizontal axis). Jack's MRS of candies for coffee is 3. Jane's MRS of candies for coffee is 3
Which one of the following statements is incorrect? A) This allocation is on the contract curve. B) This can be a competitive equilibrium. C) This allocation is Pareto efficient. D) We can reallocate goods so as to make one person better off without harming another.
Which of the following statements is not true?
a. Assuming a perfectly competitive labor market, a firm selling in a monopolistic product market will have a lower marginal revenue product curve than a firm in a perfectly competitive product market. b. The intersection of market-labor supply with market-labor demand establishes equilibrium in a perfectly competitive labor market. c. In monopsonistic labor markets, an individual firm faces a positively sloped labor-supply curve. d. In a perfectly competitive labor market, an individual firm can hire as many workers as it needs at the equilibrium wage rate e. In a monopsonistic labor market, marginal revenue product is equal to the value of marginal product.
A bank advertises a very competitive loan interest rate. Explain what measures the bank can take to address adverse selection.
What will be an ideal response?