In an efficient market without externalities,
A. price equals marginal private cost and is below marginal social cost.
B. price equals marginal private cost and marginal social cost.
C. price equals marginal private value and is below marginal external value.
D. price equals marginal private value and marginal external value.
Answer: B
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The balance of trade can only worsen if income ________ relative to absorption
A) increases B) decreases C) does not change D) None of the above
If you were going to go on a vacation to Italy, you would prefer
A. a strong dollar against the euro. B. a weak dollar against the euro. C. a strong euro against the dollar. D. a weak dollar against all currencies.
Examination of data since 1953 indicates that during this period stretching more than half a century, the Phillips curve
A) fails to exist. B) is smoothly upward sloping. C) is smoothly downward sloping. D) slopes smoothly upward at first but then slopes smoothly downward.
In general, the substitution effect of an increase in the price of a normal good:
A. will cause the individual to buy more of that good because they have relatively more income. B. will cause the individual to buy less of that good because they have relatively less income. C. will cause the individual to buy more of that good and less of others because it is relatively less expensive. D. will cause the individual to buy less of that good and more of others because it is relatively more expensive.