When the government sells something it produces,
a. revenue received must be greater than cost to justify government production
b. revenue received must equal cost because government is a nonprofit organization
c. the price does not always reflect the cost of producing the good
d. the price charged is an accurate measure of the benefits generated
e. it prices the good the same way a natural monopolist would
C
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A perfectly elastic demand curve:
A) is parallel to the price axis. B) is parallel to the quantity axis. C) slopes upward. D) slopes downward.
When a country has the ability to produce more of a good than others with a given amount of resources, they:
A. have an absolute advantage. B. have a comparative advantage. C. are free-traders. D. should remain self-sufficient.
Using graphs to illustrate the concepts, absolute advantage
a. is shown with differences in slope of a production possibilities curve; comparative advantage is shown with a lower curve. b. requires a very steep curve; comparative advantage requires a curve with a shallow slope. c. on one good requires that the slope of the production possibilities curve be steeper for that good. d. is shown with a higher production possibilities curve; comparative advantage is shown with differences in slope of the curves.
If Amber is willing to work additional hours if her wage rate increases, the substitution effect must outweigh the income effect.
Answer the following statement true (T) or false (F)