If the equilibrium quantity of a good is also the socially optimal quantity, then:
A. the marginal cost to producers of another unit of the good is zero.
B. it's possible to make at least one person better off without hurting anyone else.
C. the marginal benefit to consumers of another unit of the good is zero.
D. total economic surplus has been maximized.
Answer: D
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Government regulations
A) have no impact on supply. B) only change the quantity supplied, not the supply curve. C) are generally ineffective due to lobbying by suppliers. D) can change both quantity supplied as well as the supply curve.
If a firm in a perfectly competitive market faces a market price of $2, and it decides to increase its production from 2,000 units to 4,000 units, the firm's marginal revenue:
A. will increase from $4,000 to $8,000. B. will decrease from $8,000 to $4,000. C. will stay the same. D. None of these is true.
When you think about investments in capital goods, the one category that is most important and, at least in the long run, yields the highest returns is investment in
a. infrastructure b. raw material extraction c. factories d. education and health e. machinery
How are demand-pull and cost-push inflation reflected in terms of the AD-AS model?
What will be an ideal response?