When the amount of output is such that marginal social benefit exceeds marginal social cost, then to reach the efficient quantity
A) production should be increased.
B) production should be decreased.
C) production should remain constant.
D) More information is needed to determine if production should be increased, decreased, or not changed.
A
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If firms have rational expectations and if they set prices and wages on this basis, then prices and wages
A. will never be set at market-clearing levels. B. will always be above market-clearing levels. C. will always be at market-clearing levels. D. will, on average, be set at market-clearing levels.
An increase in the wage rate of diamond cutters will increase the supply of cut diamonds.
Answer the following statement true (T) or false (F)
Fluctuations in velocity tend to increase when measured using M1 instead of M2.
Answer the following statement true (T) or false (F)
In the above figure, suppose that the government sets a limit that may be produced of 10 units of output and the price rises to $4. The total deadweight loss would be
A) $0. B) $10. C) $15. D) $20.