When average cost is greater than marginal cost, marginal cost must be
a. rising.
b. falling.
c. constant.
d. The direction of change in marginal cost cannot be determined from this information.
d
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A situation in which a single individual can provide a public good is known as
A) a monopoly. B) the volunteer's dilemma. C) eminent domain. D) diffusion of responsibility.
In long-run equilibrium, the typical perfectly competitive firm has no incentive to:
a. change output. b. change plant size. c. enter or leave the industry. d. do any of these.
If there are both external benefits and external costs associated with the production and consumption of a good, and the external benefits are equal in magnitude to the external costs,
a. More than the efficient amount is being produced b. Less than the efficient amount is being produced c. the efficient amount is being produced d. We do not know whether the efficient amount, or more or less, is being produced.
Public choice economists hold that politicians will:
A. favor programs entailing immediate and clear-cut costs and vaguely defined or deferred benefits. B. follow policies leading to an optimal allocation of resources between public and private sectors. C. favor programs entailing immediate and clear-cut benefits and vaguely defined or deferred costs. D. objectively weigh the costs and benefits of various government programs and vote accordingly.