Refer to Figure 5-4. Why is there a deadweight loss?
A) because the marginal social cost of producing each additional unit in excess of Q2 exceeds the marginal benefit
B) because the marginal social benefit of producing each additional unit in excess of Q2 exceeds the private cost
C) because the marginal private cost of producing each additional unit in excess of Q2 exceeds the marginal benefit
D) because the marginal private benefit of producing each additional unit in excess of Q2 exceeds the social cost
A
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During recessions, unemployment ________ while the budget deficit as a percentage of GDP ________
A) increases; increases B) decreases; increases C) decreases; decreases D) increases; decreases
Refer to Table 14-9. Saudi Arabia and Yemen must decide how much oil to produce. Since the demand for oil is inelastic, relatively low production rates drive up prices and profits
Saudi Arabia, the world's largest and lowest-cost producer, is able to influence market price; it has an incentive to keep output low. Yemen, on the other hand, is a relatively high-cost producer with much smaller reserves. Use the payoff matrix in Table 14-9 to answer the following questions. a. What is the dominant strategy for Saudi Arabia? b. What is the dominant strategy for Yemen? c. What is the Nash equilibrium?
Refer to Figure 22-2. Based on the per-worker production function above, if the economy raises capital per hour worked from $35,000 to $40,000, by how much will real GDP per hour worked increase?
A) $150 B) $1,850 C) $2,000 D) $5,000
Most economists feel that the ability to alter the unemployment rate with fiscal and monetary policies is ______.
a. more limited than previously believed b. more powerful than previously believed c. impossible d. easy