If the marginal social benefit of consuming a good or a service exceeds the marginal private benefit
A) a positive externality exists.
B) a negative externality exists.
C) the sum of consumer surplus and producer surplus is maximized.
D) the market achieves economic efficiency.
A
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Comment on the following: "The problem with models like the Edgeworth Box and the Robinson Crusoe economy is that it is silly to assume competitive behavior when there are so few individuals in the market."
What will be an ideal response?
Refer to Figure 9.1. What is the maximum profit that can be achieved?
A. $250
B. $500
C. $750
D. $850
Which of the following statements is not correct?
a. Male workers with good looks tend to earn more than male workers with average looks b. If discriminating wage differentials persist in competitive markets, it is primarily because employers chose to discriminate even in spite of customer preferences. c. A higher level of human capital raises a worker's wages. d. In competitive markets, workers are paid a wage equal to the value of their marginal product.
The changing age structure of the U.S. population and more efficient labor markets are both possible explanations for:
A. the 2001 recession. B. the increase in the cyclical rate of unemployment. C. the stagnation of real wages. D. the decline in the natural rate of unemployment.