Allocative efficiency is achieved when the production is such that
A) the marginal benefit exceeds the marginal cost by as much as possible.
B) marginal cost equals zero.
C) marginal benefit is equal to marginal cost.
D) the production point is on the PPF.
E) None of the above is true.
C
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If a perfectly competitive firm's price is above its average total cost, the firm
A) is incurring a loss. B) should shut down. C) is earning a profit. D) is breaking even.
In the ISLM framework a contractionary fiscal policy causes aggregate output to ________ and the interest rate to ________, everything else held constant
A) increase; increase B) increase; decrease C) decrease; decrease D) decrease; increase
The world price of a ton of steel is $1,000 . Before Russia allowed trade in steel, the price of a ton of steel there was $650 . Once Russia allowed trade in steel with other countries, Russia began
a. exporting steel and the price per ton in Russia remained at $650. b. exporting steel and the price per ton in Russia increased to $1,000. c. importing steel and the price per ton in Russia remained at $650. d. importing steel and the price per ton in Russia increased to $1,000.
Ceteris paribus, an increase in the supply of a good causes which of the following?
A. Lowers the equilibrium price, and reduces the quantity bought and sold. B. Raises the equilibrium price, and raises the quantity bought and sold. C. Raises the equilibrium price, and increases the quantity bought and sold. D. Lowers the equilibrium price, and increases the quantity bought and sold.