Suppose a country produces only bikes and clothing. The country achieves an efficient allocation of resources when
A) it can't produce any more bikes unless it gives up clothing.
B) it produces equal amount of bikes and clothes.
C) the marginal social benefit of producing a bike equals the marginal social cost of producing a bike.
D) the prices charged for the goods are as low as possible.
C
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A key factor that leads to economic growth is
A) human capital accumulation. B) increasing current consumption. C) avoiding the opportunity cost of investment. D) Both answers A and B are correct.
Suppose the demand for saline solution is perfectly inelastic for contact lens wearers
If the government imposes a tax on saline solution, what occurs? Be sure to tell what happens to the price paid by the buyers and discuss the incidence of the tax.
According to public choice theorists, people behave differently in the market sector than in the public sector because
A) the more people there are in the market sector the less influence they are able to exert, whereas the more people there are in the public sector the more influence they are able to exert. B) the fewer people there are in the market sector the less influence they are able to exert, whereas the fewer people there are in the public sector the more influence they are able to exert. C) self-interest is the motivating force in the market sector, whereas altruism is the motivating force in the public sector. D) altruism is the motivating force in the market sector, whereas self-interest is the motivating force in the public sector. E) institutional arrangements are different in the two sectors.
Goods that are rival in consumption, but not excludable are:
A. a common resource. B. a private good. C. a public good. D. an artificially scarce good.