Even though the efficient use of resources enhances social welfare, it may not always be optimal from society's perspective. Why is this statement true?
a. Efficiency leads to lower per unit costs; thus, promoting any method of cost control increases efficiency.
b. The ethical use of resources can be just as important as their efficient use.
c. If market action does not result in an efficient outcome, government action can always improve the outcome.
d. Efficient outcomes sometimes waste resources.
e. Markets always reward efficiency, even if there is only one firm in it.
b. The ethical use of resources can be just as important as their efficient use.
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Explain why it is more difficult to determine the incidence of the corporate income tax than it is to determine the incidence of the tax on gasoline
What will be an ideal response?
In general, the deadweight loss associated with an import tariff or quota becomes relatively larger when:
A) supply and demand are inelastic. B) supply is elastic and demand is inelastic. C) demand is elastic and supply is inelastic. D) supply and demand are elastic.
If the government wants a natural monopoly to earn a "fair return" or zero economic profit, it will set
a. price equal to marginal cost. b. price equal to average total cost. c. price equal to average revenue. d. marginal cost equal to marginal revenue. e. marginal cost equal to average total cost.
Most studies have found that tobacco and marijuana are substitutes rather than complements
a. True b. False Indicate whether the statement is true or false