An economy produces outputs X and Y using inputs L and K. Which of the following is NOT required for economic efficiency?
A) MRTSLK = MRSXY for all producers and consumers.
B) MRTXY = MRSXY for all producers and consumers.
C) MRSXY is equal for all consumers.
D) MRTSLK is equal for all producers.
E) None of the above. All of these are required for economic efficiency.
A
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When will setting a relatively high entry fee and a low competitive price be the best strategy for a two-part tariff monopolist?
a. When the customers are nearly identical. b. When the customers have inelastic demand for the product. c. When the customers place a relatively low value on their time. d. When the customers can be separated into a number of diverse groups.
Use the figure below to answer the following question.
If the output level increases from Q2 to Q3, then the marginal cost of the product
A. increases while its marginal benefit decreases and the market no longer achieves allocative efficiency. B. stays constant while its marginal benefit increases and the market no longer achieves allocative efficiency. C. increases while its marginal benefit decreases and the market achieves allocative efficiency. D. becomes closer to its marginal benefit and the market achieves allocative efficiency.
Cab drivers operating from JFK Airport to the City of New York legally must charge a specific fare. This is an example of
A) social regulation. B) economic regulation. C) the market share test. D) the rate of return test.
In economic utility analysis, consumer tastes and preferences are assumed
A) to be determined by income. B) to be influenced by the prices of goods. C) given and stable for an individual. D) given but rapidly changeable.