For production to be at the ________ level of output, marginal benefit must equal social cost.
A. loss-minimizing
B. profit-maximizing
C. efficient
D. shut-down
Answer: C
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What is meant by diminishing marginal benefits? Are you likely to experience diminishing marginal benefits for goods that you like a lot? Are there exceptions to the general rule of diminishing marginal benefits? (Hint: think about batteries that you
would use in a flashlight that requires two batteries.) Explain your answer.
When there is a negative externality, the competitive output is greater than the economically efficient output level
Indicate whether the statement is true or false
The demand for reserves increases as the price level rises because
a. people want money to buy goods that will appreciate with inflation. b. people need more money to finance transactions. c. the opportunity cost of holding money increases. d. higher prices reduce the value of dollar assets.
Expected economic profit per unit is equal to:
A. expected price. B. expected average total cost. C. the difference between expected total revenue and expected total cost. D. the difference between expected price and expected average total cost.