An efficient distribution of goods requires that
a. everyone gets an equal share of each good.
b. marginal cost equal marginal utility for the last unit produced.
c. each person derives the same total utility from the good.
d. since tastes differ, every person pays a different price in accordance with different marginal utilities.
b
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The price elasticity of demand is a measure of:
A. the change in quantity demanded of a good that results from a change in its price. B. the demand for a good. C. how consumers respond to excess demand. D. the change in price of a good that results from a change in its quantity demanded.
Sophia sits behind Gabriel on an airplane. Gabriel owns the right to recline his seat and values this right at $10 . Sophia values a non-reclined seat in front of her at $40 . Assuming no transaction costs, which of the following represents an efficient solution?
a. Sophia offers Gabriel between $10 and $40 to not recline his seat. Gabriel accepts, and both parties are better off. b. Sophia offers Gabriel between $0 and $10 to not recline his seat. Gabriel accepts, and Sophia is better off. c. Sophia offers Gabriel between $10 and $40 to not recline his seat. Gabriel declines because he has the right to recline his seat. d. Gabriel offers Sophia between $10 and $40 to recline his seat. Sophia accepts, and both parties are better off.
The monopolist's outcome in the long run differs from that of the perfectly competitive firm in that it:
A. charges a price where marginal costs equal average revenue. B. charges a price above average total costs. C. has zero profits in the long run. D. charges a price equal to MC.
In India, services have led to growth, particularly in the software industry.
Answer the following statement true (T) or false (F)