The idea that an action should be undertaken if and only if the benefits exceed the costs is known as the concept of
a. economic efficiency.
b. public welfare maximization.
c. marginal comparative advantage.
d. monetary construction of values.
A
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A tariff differs from a quota in that a tariff is:
a. levied on imports, whereas a quota is imposed on exports. b. levied on exports, whereas a quota is imposed on imports. c. a tax levied on exports, whereas a quota is a limit on the number of units of a good that can be exported. d. a tax imposed on imports, whereas a quota is an absolute limit to the number of units of a good that can be imported.
If liquidated damages stated in a contract are too low, inefficient breaches will be profitable, and if damages are too high, efficient breaches will not occur
Indicate whether the statement is true or false
The marginal social cost curve lies below the marginal private cost curve, with the vertical difference between the two curves representing the marginal external cost
Indicate whether the statement is true or false
Figure 5-15
Hal initially consumes the combination marked as A in Figure 5-15. After his income increases, Hal consumes combination B. We can conclude that Hal views
a.
X as an inferior good and Y as a noninferior good.
b.
X as a noninferior good and Y as an inferior good.
c.
both X and Y as noninferior goods.
d.
both X and Y as inferior goods.