When a competitive market achieves allocative efficiency, it is implied that
A. the quantity demanded is lower than the quantity supplied.
B. the marginal benefit of having the product is greater than the marginal cost.
C. the combined consumer and producer surplus is maximized.
D. the buyers are getting the maximum consumer surplus from the product.
Answer: C
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Which of the following will most likely occur under a system of clearly defined and enforced private property rights?
a. Resource owners will fail to conserve vital resources, even if they expect their supply to be highly limited in the future. b. Resource owners will ignore the wishes of others, including others who would like to use the resource that is privately owned. c. Resource owners will fail to consider the wishes of potential future buyers when they decide how to employ privately owned resources. d. Resource owners will gain by discovering and employing their resources in ways that are highly valued by others.
A tax is progressive if it takes a
A. Smaller fraction of income as income falls. B. Larger number of dollars as income falls. C. Smaller fraction of income as income rises. D. Smaller number of dollars as income rises.
For an oligopoly, when the quantity effect outweighs the price effect, firms may have the incentive to:
A. leave the industry. B. increase output. C. not change the level of output. D. decrease output.
A business produces 400 items and sells them for $15 each for a total of $6,000. The total cost of producing the items is $4,500 in explicit cost and $1,000 in implicit cost. Economic profit is:
A. $500. B. $0. C. $1,500. D. $1,000.