When an externality is present, the market equilibrium is
a. efficient, and the equilibrium maximizes the total benefit to society as a whole.
b. efficient, but the equilibrium does not maximize the total benefit to society as a whole.
c. inefficient, but the equilibrium maximizes the total benefit to society as a whole.
d. inefficient, and the equilibrium does not maximize the total benefit to society as a whole.
d
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If the demand curve for gasoline is relatively steep, then
a. higher gasoline prices would cause a large number of people to stop driving. b. the law of demand does not hold for gasoline. c. shifts in the supply curve for gasoline will have relatively little effect on the price of gasoline. d. the price of gasoline has relatively little effect on drivers' decision to buy gasoline.
When the price level rises and the money wage rate does not change,
A) the quantity of potential GDP increases because the quantity of real GDP supplied increases. B) the quantity of real GDP supplied increases as more businesses start up and potential GDP does not change. C) existing businesses do not change their level of output. D) profits fall and more businesses fail. E) the quantity of real GDP supplied decreases as more businesses fail and potential GDP does not change.
If a firm is operating in a perfectly competitive market in which the market price equals $12, then its
a. marginal revenue is $12 b. marginal revenue is less than $12 c. marginal revenue is greater than $12 d. marginal cost is less than $12 e. marginal cost is greater than $12
Refer to the accompanying figure. The total utility of consuming two pizzas a week is:
A. 25 B. 75 C. 30 D. 55