If a good is produced up to the point where marginal social benefit equals marginal social cost, then:
a. social welfare is maximized.
b. the good is overproduced and the market is inefficient.
c. firms are earning zero profits.
d. all externalities have been eliminated.
a
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In a housing market with no rent ceilings, the equilibrium rent is that for which the quantity of apartments demanded
A) equals the quantity supplied. B) is greater than the quantity supplied. C) is less than the quantity supplied. D) might be greater than, equal to, or less than the quantity supplied depending on whether the supply curve is upward sloping, horizontal, or vertical. E) None of the above answers is correct because without rent ceilings there is no equilibrium rent.
Public goods are ________ in consumption
A) excludable but non-rival B) non-excludable and non-rival C) rival but non-excludable D) excludable and rival
In the above figure, household income is shown by flow
A) A. B) B. C) C. D) F.
Suppose the production of helicopters is an industry characterized by increasing returns to scale and an Argentine firm, Cicare, is the only player in this market. The firm caters to the global market and earns a profit of $10 million. Flettner, a German firm has been considering entering this market for a while, but it is aware that its entry will cause each firm to lose about $4 million
However, a government subsidy allows Flettner to enter the helicopter market and Cicare incurs a loss of $4 million due to its entry. Eventually, Flettner evolves as the monopoly supplier of helicopters while Cicare is forced to shut down. This conclusion rests on which of the following assumptions? a. The German government was experiencing a budget surplus. b. There was low demand for Cicare automobiles in the world market. c. The German government was able to forecast accurately the subsidy required to induce Flettner to produce helicopters. d. The quality of Flettner's helicopters were inferior compared to that of Cicare's. e. Cicare diversified into the production of automobiles.