Medical research that results in a cure for a serious disease produces positive externalities. What is the impact of this positive externality on economic efficiency?
A) At equilibrium, less than the economically efficient quantity of medical research is produced.
B) At equilibrium, more than the economically efficient quantity of medical research is produced.
C) A deadweight loss occurs because at equilibrium the marginal social cost of medical research is greater than the marginal social benefit.
D) A deadweight loss occurs because at equilibrium the marginal social cost equals the marginal social benefit.
A
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Suppose that in a month the price of a cup of coffee increases from $1 to $1.50. At the same time, the quantity of cups of coffee demanded decreases from 200 to 190. The price elasticity of demand for cups of coffee (calculated using the midpoint formula) is approximately:
A. 0.13. B. 0.5. C. 7.8. D. 20.
Which is necessarily true for a perfectly competitive firm in short-run equilibrium?
A. Price minus average total cost equals zero. B. Marginal revenue is zero. C. Marginal revenue minus marginal cost equals zero. D. Total revenue minus total cost equals zero.
If an individual's income increases, then the demand for a normal good will:
a. decrease. b. increase. c. remain constant. d. rotate. e. fall to zero.
Gdp:
a. is the dollar value of all the final goods and services produced within the borders of a nation. b. includes intermediate and final goods and services. c. minus an allowance for depreciation of fixed capital equals GNP. d. is a less-than-perfect measure of social well-being because it does not include exports and imports. e. all of these.