The above figure shows the marginal social benefit and marginal social cost curves of doughnuts in the nation of Kaffenia. At Kaffenia's efficient quantity of doughnuts
A) total consumer surplus is zero.
B) total producer surplus is zero.
C) consumer surplus exceeds producer surplus by the greatest possible amount.
D) the sum of consumer surplus and producer surplus is maximized.
D
You might also like to view...
The incentive to work is an ingredient of the negative income tax because:
a. if families do work, they will be eliminated from the program. b. if families don't work, they will be eliminated from the program. c. the more income earned in the workplace, the higher the family's after-tax income. d. the more income earned in the workplace, the higher the payment from the government. e. the amount earned in the workplace is not subject to income taxes.
The economy's self-correcting mechanism is such that demand shocks are offset in the long run by shifts of aggregate supply and supply shocks are offset by shifts of aggregate demand
a. True b. False
Government-operated firms with monopoly power
a. will necessarily meet the criteria of economic efficiency, as long as price equals average total cost. b. will always be more efficient than private firms because they do not have to make a profit. c. are likely to be inefficient since some of the monopoly power is likely to serve the interests of the governmental managers and employees. d. are highly responsive to changes in the preferences of individual consumers since consumers are also voters.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, Point F
A. is efficient and attainable. B. cannot be produced with the current state of technology. C. represents underallocation of resources. D. represents what the people want.