If a government action is designed to achieve efficiency, then the action must have the market produce the amount of output so that the
A) marginal private cost equals the marginal private benefit.
B) marginal social cost equals the marginal social benefit.
C) marginal external cost equals the marginal external benefit.
D) marginal private cost equals the tax.
E) marginal social benefit exceeds the marginal social cost by as much as possible.
B
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Assume a marginal propensity to consume of three-fourths. If private planned investment decreases by $10 billion and government spending increases by $13 billion, the national income will increase by
a. $4 billion. b. $12 billion. c. $3 billion. d. $2.25 billion.
Which of the following is included in the aggregate demand for goods and services?
a. consumption demand
b. investment demand
c. net exports
d. All of the above are correct.
Discuss the characteristics of a perfect competitive industry and which real-life industries come closest to this type of market structure.
What will be an ideal response?
To an economist, the economic costs associated with the use of resources include
A. explicit and implicit costs. B. explicit, but not implicit, costs. C. neither implicit nor explicit costs. D. implicit, but not explicit, costs.