The above figure shows the marginal benefit and marginal cost curves for a public good. The quantity that has the best prospect of winning in an election by well-informed voters is
A) A.
B) B.
C) C.
D) zero units supplied.
B
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
An industry with Herfindahl-Hershman Index of 10,000 would best be described as
A. oligopoly. B. perfect competition. C. monopolistic competition. D. monopoly.
An increase in demand will lead to a decrease in supply in the long run.
Answer the following statement true (T) or false (F)
One of the assumptions underlying the production possibilities curve is that
A. there is at least one factor of production that is employed inefficiently. B. the quantity of the resources available for the production of economic goods is fixed over a given time period. C. at least one of the factors of production is a free good. D. some of the factors of production are not being used.