Taxes on products with elastic supply and demand curves result in ______.
a. less deadweight loss
b. fewer mutually beneficial transactions
c. more total output
d. a greater quantity of goods exchanged
b. fewer mutually beneficial transactions
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If an economy is producing on its PPF, then it is definitely achieving
A) both production and allocative efficiency. B) only production efficiency, but it definitely is not achieving allocative efficiency. C) only allocative efficiency, but it is definitely not achieving production efficiency. D) neither production nor allocative efficiency. E) only production efficiency.
In perfect competition, each individual firm faces ________ demand curve
A) an inelastic B) an upward sloping C) a perfectly elastic D) a downward sloping
Refer to Figure 4-6. At the price P2, consumers are willing to buy the Q2 pounds of granola. Is this an economically efficient quantity?
A) Yes, otherwise consumers would not buy Q2 units. B) Yes, because the price P2 shows what consumers are willing to pay for the product. C) No, the marginal benefit of the last unit (Q2 ) exceeds the marginal cost of that last unit. D) No, the marginal cost of the last unit (Q2 ) exceeds the marginal benefit of the last unit.
Perfect competition is an ideal market structure.
Answer the following statement true (T) or false (F)