A monopoly misallocates resources when it
A) restricts output so that the marginal benefit of the last unit sold exceeds the marginal social cost of producing the good.
B) makes an above-normal profit.
C) sells the same product to different groups of customers at different prices.
D) exploits scale economies.
A
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Suppose a new technology is developed that increases the productivity of labor. You would expect
A. the wage rate to fall, since employers will want less labor. B. the demand for labor to fall. C. the demand for labor to rise. D. an increase in unemployment as firms replace labor with technology.
The above figure shows the marginal social benefit and marginal social cost curves of doughnuts in the nation of Kaffenia. What is the marginal social benefit from the 300th dozen doughnuts each day?
A) $10.00 per dozen B) $8.00 per dozen C) $6.00 per dozen D) $4.00 per dozen
The problem of having unlimited wants under the constraint of limited resources can describe the problem of:
A. opportunity cost. B. sunk costs. C. scarcity. D. the marginal principle.
According to the accompanying table, Julia has the absolute advantage in making: Time to Make a PieTime to Make a CakeMartha60 minutes80 minutesJulia50 minutes60 minutes
A. pies. B. cakes. C. both pies and cakes. D. neither pies nor cakes.