Which of the following statements best expresses why economic efficiency should be society's first goal?
A. Efficiency maximizes total economic surplus and thereby allows other goals to be more easily achieved.
B. Since the consensus on what is a fair distribution of goods is impossible, efficiency is the next best goal.
C. People are not really concerned about the problems of the poor, so government must address them instead.
D. Efficiency gives the poor an incentive to improve their economic status.
Answer: A
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If the demand curve is the same as the marginal benefit curve and the supply curve is the same as the marginal cost curve, then the quantity at which they cross is
i. the equilibrium quantity. ii. the allocatively efficient quantity. iii. the quantity with no deadweight loss. A) i, ii, and iii. B) only i. C) only ii. D) only i and ii. E) only i and iii.
Figure 2-6
A shift in the production possibilities frontier from DC to EC in could be due to a
a.
technological improvement in the production of ice cream
b.
reduction in the rate of unemployment
c.
rise in the rate of unemployment
d.
technological improvement in the production of frozen yogurt
e.
fall in the demand for frozen yogurt
Ceteris paribus, if the employment rate is rising, the GDP per capita is
A. Not changing. B. Falling. C. Rising. D. It is impossible to determine because the employment rate is not related to GDP per capita.
What happens to standards of living over time with stagnant economic growth rates?
a. steady growth b. little change c. regulatory control d. notable decrease