It is efficient to increase the output of computers if
A. society considers the extra computers more valuable than other goods foregone to produce the computers.
B. the opportunity cost of more computers is greater than their marginal utility.
C. computer production can be increased only if production of other goods is decreased.
D. the price of the computers is equal to their average cost.
Answer: A
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Activity aimed at creating artificial barriers to entry into a particular market
A) is rent seeking. B) has no social cost. C) improves competition. D) improves the economy's efficiency.
Under which of the following situations would a seller prefer to incur the cost of improving the product quality?
a. If the increase in buyer's valuation for the improved product is higher than the cost of improving it. b. If the increase in the seller's opportunity cost of improving the product is higher than the price of the product. c. If the product improvement lowers the producer surplus. d. If the product improvement allows the seller to a break even.
For activities in which the benefits are concentrated and the costs widespread, governments are likely to undertake
a. too little of these activities relative to what would be efficient. b. too much of these activities relative to what would be efficient. c. exactly the amount of these activities that would be efficient. d. none of these activities.
The difference between a perfectly competitive firm and a monopolistically competitive firm is that a monopolistically competitive firm faces a:
A. horizontal demand curve and price exceeds marginal cost in equilibrium. B. downward-sloping demand curve and price exceeds marginal cost in equilibrium. C. horizontal demand curve and price equals marginal cost in equilibrium. D. downward-sloping demand curve and price equals marginal cost in equilibrium.