If transaction costs can be reduced in a marketplace, then total producer and consumer surplus will
A. increase first and then decrease.
B. stay the same.
C. increase.
D. decrease.
Answer: C
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What is productive efficiency?
A) a situation in which firms produce as much as possible B) a situation in which resources are allocated such the last unit of output produced provides a marginal benefit to consumers equal to the marginal cost of producing it C) a situation in which resources are allocated such that goods can be produced at their lowest possible average cost D) a situation in which resources are allocated to their highest profit use
Consider a town with three residents. The residents' demand curves for various acres of a public park are shown below.
Suppose the city receives a grant that pays one half of the cost of each acre the city buys. If the cost of land is $28 per acre, the optimal park size is
A. 6. B. 2. C. 4. D. 8.
The three broad types of resources used to produce goods and services are also known as:
A) economic systems. B) factors of production. C) production possibilities. D) financial capital.
If a firm with monopoly pricing power in the market faces a demand curve of P = 2,000 - 2Q and marginal cost of MC = 1,100 + 2Q, then the firm will produce
A. 542 units. B. 900 units. C. 200 units. D. 150 units.