The efficient level of paper production will occur where the
A) marginal private benefit from consuming paper is equal to the marginal social cost of production.
B) marginal social benefit from consuming paper is equal to the marginal social cost of production.
C) economically efficient level of the output of paper is equal to the economically efficient level of inputs.
D) production of paper no longer produces negative externalities.
Answer: A
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Keynes noted that that one solution to a recession was increased government spending, and while it would be nice if the government could spend additional money on housing, roads, and other amenities, he also argued that if the government could not agree on how to spend money in practical ways, then
a. it should not spend the additional money. b. a trade-off would appear. c. the Phillips curve would shift. d. it should spend in impractical ways.
If the CPI equaled 1.43 in 2008 and 1.56 in 2009, then between 2008 and 2009 there was:
A. deflation. B. a recession. C. an expansion. D. inflation.
If the firm produces at Q3, the firm:
A. will receive less profits that if it produces at Q2. B. maximizes profits. C. Minimizes costs. D. will receive less profits than if it produces at Q4.
Explain why resources are used efficiently in a competitive market
What will be an ideal response?