If there are no externalities, producing where price is greater than marginal cost is inefficient because for every unit produced, consumers derive benefits that are less than the cost of the resources needed to produce it.
Answer the following statement true (T) or false (F)
False
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What, according to the textbook, accounts for the federal budget surplus in the late 1990s?
A) A move toward virtue on Capital Hill B) Strong economic growth during that period C) Huge increases in tax rates D) A successful beggar-thy-neighbor strategy
An increase in a consumer's income
a. increases the slope of the consumer's budget constraint. b. has no effect on the slope of the consumer's budget constraint. c. decreases the slope of the consumer's budget constraint. d. has no effect on the consumer's budget constraint.
The real rate of return on holding cash ________ inflation is correctly anticipated.
A. is higher when B. equals the nominal interest rate when C. is lower when D. does not depend on whether
Other things equal, a decrease in government spending ________ the equilibrium interest rate and ________ equilibrium output.
A. decreases; decreases B. decreases; increases C. increases; decreases D. increases; increases