Assuming there are no externalities, if a firm produces an output level where the benefits to consumers ________ the cost to suppliers to produce it, then price is ________ marginal cost.
A. are less than; greater than
B. exceed; less than
C. equal; less than
D. exceed; greater than
Answer: D
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Which best expresses the law of diminishing marginal utility?
A. The more a product is consumed, the greater the total utility received from the product. B. The less a product is consumed, the smaller the marginal utility received from the product. C. The more a product is consumed, the smaller the total utility received from the product. D. The more a product is consumed, the smaller the marginal utility received from the product.
"Coffee Prices Sink As Demand Falls." The newspaper heading
A) assumes the law of demand does not hold. B) confuses demand with quantity demanded. C) misunderstands the role of supply in price formation. D) reverses the actual relationship between price and demand. E) uses the concept of demand correctly.
The economy is in a recessionary gap and a Keynesian economist advocates expansionary fiscal policy. What is a likely reason this economist advocates expansionary fiscal policy?
A) The economist believes the economy is stuck in a recessionary gap and crowding out will be complete. B) The economist believes the economy is stuck in a recessionary gap and there will be no crowding out. C) The economist believes that wages are too flexible and that crowding out will be incomplete. D) The economist believes the AD curve is downward-sloping, the SRAS curve is upward-sloping, and prices are flexible. E) none of the above
When a nation is in a debt crisis, the government's level of debt is so high that:
A. monetary policy is ineffective. B. the government is unable to find willing lenders so it can continue borrowing. C. it can only be solved with a fiscal stimulus of lower taxes and more government spending. D. other countries will be unwilling to buy goods and services from the nation.