Producing more cabbage will be inefficient if
A. the marginal opportunity cost of cabbage is less than the marginal value.
B. cabbage production can be increased without reducing production of other goods.
C. the marginal value of forgone lettuce is greater than the marginal value of cabbage.
D. the marginal value of forgone lettuce is less than the marginal value of cabbage.
Answer: C
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A natural monopoly occurs when
a. the product is sold in its natural state, such as water or diamonds. b. there are economies of scale over the relevant range of output. c. the firm is characterized by a rising marginal cost curve. d. production requires the use of free natural resources, such as water or air.
Milton Friedman and Edmund Phelps ______ the Phillips curve in the 1960s.
a. eliminated b. promoted c. invented d. criticized
In a market for emission permits, firms that emit over their allowed limits
A) are forced to shut down. B) are taxed by the government for the amount of emissions. C) receive a subsidy for the amount of emissions. D) pay a price of these emissions.
Some markets have many buyers and sellers but fall into the category of monopolistic competition rather than perfect competition. The most common reason for this is
A) there are high barriers to entering these markets. B) firms in these markets sell identical products. C) firms in these markets make high profits. D) firms in these markets do not sell identical products.