When economic efficiency is attained, it implies all of the following, except:
A. Per-unit cost of output produced is at minimum
B. Allocative efficiency is achieved
C. Total consumer and producer surplus is at a maximum
D. The gap between marginal benefits and marginal costs of production is at maximum
D. The gap between marginal benefits and marginal costs of production is at maximum
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Which of the following is likely to have the smallest price elasticity of demand?
A) an automobile B) a new automobile C) a new Ford automobile D) a new Ford Mustang
Suppose the market demand function in a certain market where Q is measured in thousands of units is Qd = 20 - 2.5P, and the market supply function is Qs = 2.5P - 7.5. How much deadweight loss would there be in this market if the quantity bought and sold was 8,500 units?
A. $2.03 B. $4.05 C. $1,800 D. $2,025
For a firm in a perfectly competitive market, if it produces where marginal cost exceeds marginal revenue it:
A. is impossible to tell if it is actually maximizing profits. B. should increase production to increase profits. C. should cut back production to increase profits. D. is producing a profit-maximizing quantity.
In behavioral economics, the endowment effect refers to
A) most people believe that most wealthy people inherit their wealth. B) many people would be indifferent between being endowed with money or knowledge. C) many people place a higher value on what they own than when they consider purchasing. D) most people respond to tax incentives to provide an endowment for their children.