Assuming no externalities exist, if a good's price is more than its marginal cost, then the benefits consumers derive are ________ than the cost of resources needed to produce it and ________ should be produced.
A. less; less
B. less; more
C. greater; less
D. greater; more
Answer: D
You might also like to view...
The idea that new policies change the economic rules and affect economic behavior, so that no one can safely assume that historical relationships between variables will hold when policies change, is known as
A) Okun's Law. B) Say's Law. C) the equation of exchange. D) the Lucas critique.
If W is the nominal wage rate, N is the quantity of labor, P is the price level, and Y is real income, then labor's share in national income is
A) WN - PY. B) WP/YN. C) WN/PY. D) PY - WN.
In behavioral economics, the endowment effect refers to the fact that
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 the same item they are considering purchasing. D) most people respond to tax incentives to provide an endowment for their children.
According to the graph shown, if the market is in equilibrium, consumer surplus is:
A. $30.
B. $20.
C. $50.
D. $60