The above figure shows the marginal social benefit and marginal social cost curves of doughnuts in the nation of Kaffenia. What is the marginal social benefit from the 300th dozen doughnuts each day?
A) $10.00 per dozen
B) $8.00 per dozen
C) $6.00 per dozen
D) $4.00 per dozen
D
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Increases in the debt—GDP ratio are primarily caused by
A) a high growth rate of GDP. B) a high government deficit relative to GDP. C) increases in government borrowing through bonds. D) increases in interest rates.
If total utility increases by smaller and smaller amounts as more units of a product are consumed, then marginal utility is:
a. decreasing and is a negative amount. b. decreasing and is a positive amount. c. zero. d. increasing and is a negative amount. e. increasing and is a positive amount.
If pollution is reduced below the socially efficient level:
a. the marginal cost of pollution abatement exceeds the marginal benefit of pollution abatement b. the marginal cost of pollution abatement is less than the marginal benefit of pollution abatement. c. the marginal cost of pollution abatement equals the marginal benefit of pollution abatement. d. nothing can be said about the relationship between the marginal cost and marginal benefit of pollution abatement.
Two ways to postpone diminishing returns are:
a. Increase labor and improve education. b. Increase all resources together and make the production process more efficient. c. Actually, there is no way to postpone diminishing returns. d. Keep the government budget balanced and increase the money supply at a rate that keeps inflation low (e.g., at 2% or whatever the national goal happens to be). e. Increase the quantity of capital.