A situation in which the price charged is less than society's opportunity cost would lead to
A) too little being produced.
B) too much being produced.
C) an efficient amount being produced.
D) marginal cost pricing.
B
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Legislating input combinations in a particular industry can bias the decision making of the firm's managers and lead to higher-than-necessary costs of production.
Answer the following statement(s) true (T) or false (F)
Marylou, whose utility of wealth curve is shown in the figure above, faces two options. Option A yields her $200 for sure. Option B has a 0.4 probability of yielding $100 and a 0.6 probability of yielding $300. Marylou
A) picks option A. B) picks option B. C) is indifferent between option A and option B. D) needs more information to make a choice.
Which of the following factors does not affect the long-run supply and demand conditions of foreign currencies?
A) Relative inflation rates B) Relative productivity levels C) Tastes for domestic versus foreign goods D) All of the above affect the long-run supply and demand conditions of foreign currencies.
With only two goods, if the income effect is in the opposite direction as the substitution effect but the substitution effect dominates then the good is
a. normal b. inferior but not Giffen c. Giffen d. There is not enough information to answer.