Allocative efficiency in a market means that resources are appropriated such that
a. the additional social benefits outweigh the additional social costs
b. the additional social benefits outweigh the additional private benefits
c. the marginal social benefits are equal to the marginal social costs
d. the marginal social benefits are greater than the marginal social costs
c. the marginal social benefits are equal to the marginal social costs
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The circular flow model shows the flow of
A) expenditure and income throughout the economy. B) only money throughout the economy. C) only funds in stock and bond markets. D) only tax payments and government expenditures. E) goods markets and factor markets as they move through the economy.
It is assumed that the marginal benefit of air cleanliness falls with the degree of cleanliness since
A) the marginal cost of air cleanliness increases. B) air cleanliness is a public good and not a private good. C) the marginal utility of air cleanliness falls with the degree of cleanliness. D) the generation of pollution should be considered an externality.
As Product Co adds the first four workers to its production process in the short run, its output rises from 0 to 12 to 25 to 35 to 43 . Addition of the fifth worker will most likely lead to an output rate
a. greater than 51 b. equal to 51 c. less than 51 d. greater than 51 if the firm experiences diseconomies of scale e. none of the above
What will most likely happen to the standard of living in a country that achieves sustained economic growth through increased productivity?
a. It will initially decrease and then increase. b. It will decrease. c. It will remain unchanged. d. It will increase.