Answer the following statement(s) true (T) or false (F)
1. If a market is perfectly competitive, allocative efficiency is achieved at the point where the profit-maximizing firm produces.
2. If a firm maximizes output from a stock of available resources, it must be achieving allocative efficiency.
3. Consumer surplus is the net gain to the firm measured as the excess of price over the marginal cost of production summed over all units sold.
4. If a consumer is willing to pay more for a good than he/she actually must pay, he/she enjoys a gain for that unit of output known as consumer surplus.
5. The sum of the change in consumer surplus plus the change in producer surplus is called deadweight loss to society.
1. True
2. False
3. False
4. True
5. True
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Which one of the following is a characteristic of capitalism but not of communism?
a. private property. b. wage payments. c. technological development. d. use of capital equipment.
The break-even quantity is
a. 10000 b. 5,555 c. 12,500 d. 5,000
According to the "law" of demand, we would expect
a. the demand curve to be negatively sloped. b. the demand curve to be positively sloped. c. the total quantity demanded by the market to move in the same direction as price. d. marginal utility to increase as quantity demanded increases.
Compared to IACs, LDCs are often characterized by:
a. lower adult literacy. b. lower per capita energy consumption. c. lower life expectancy. d. All of the answers are correct.