The deadweight loss represent the sum of added consumer and producer surplus if the firm would produce the quantity where P = MC
Indicate whether the statement is true or false
True . If P = MC is produced quantity increases and the deadweight loss is turned into CS and PS. This will increase total welfare.
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A decrease in demand for a product, holding other things constant, will
A) increase the marginal revenue product of labor. B) decrease the marginal revenue product of labor. C) not change the marginal revenue product of labor. D) have an undetermined effect upon the marginal revenue product of labor.
Classical economists believed that
A. if saving exceeded investment, prices and interest rates would rise as business accumulated unwanted inventories. B. flexible prices and wages could not restore an economy to full employment if the interest rate were rigid. C. flexible interest rates, wages, and prices would assure full employment. D. voluntary unemployment reflected economic inefficiency.
It is assumed in economics that people make decisions based upon
A) altruism. B) rational self-interest. C) tradition. D) perfect information about every aspect of the world.
The United States was taken off the gold standard by
A. President Jimmy Carter. B. President Richard Nixon. C. President Lyndon Johnson. D. President Ronald Reagan.