In a competitive market, an efficient allocation of resources is characterized by:
a. a price greater than the marginal cost of production.
b. the possibility of further mutually beneficial transactions.
c. the largest possible sum of consumer and producer surplus.
d. a value of consumer surplus equal to that of producer surplus.
c
You might also like to view...
According to this Application, the economic effects of increases in temperature seem to
A) be confined to poorer countries. B) be confined to richer countries. C) be nonexistent in most countries. D) be equal across all countries.
A competitive industry consists of 100 firms. The short-run marginal cost curve for each firm is given by MC = 200 + .3Q. The demand curve faced by the industry is given as P = 400 - .1Q. What is the producer surplus for each firm?
What will be an ideal response?
Figure 2-9
Assume that the publishing industry produces novels and textbooks, as shown in the production possibilities frontier in . Between points F and G, the opportunity cost of ten more novels equals __________. Between points G and H, the opportunity cost of ten more novels equals __________.
a.
0.4 textbooks; 0.5 textbooks
b.
4 textbooks; 5 textbooks
c.
4 million textbooks; 5 million textbooks
d.
2.5 textbooks; 2 textbooks
e.
10 million textbooks; 5 million textbooks
One criticism of the corporate income tax is that
A. it is so complex to administer that corporate income taxes are rarely collected by the Internal Revenue Service. B. it is too regressive. C. a portion of the corporations' tax burden is passed on to consumers via higher prices for goods and services and to workers via lower wages. D. it is too flat.