When the efficient quantity of output is produced
A) the marginal social benefit of the last unit produced is equal to the marginal social cost of the last unit produced.
B) the sum of consumer surplus and producer surplus is maximized.
C) resources are used in the activities in which they are most highly valued.
D) All of the above answers are correct.
D
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The downward sloping labor demand curve demonstrates that as the ________ increases the ________ decreases
A) nominal wage; amount of labor supplied B) real wage; amount of labor supplied C) real wage; amount of labor hired D) nominal wage; amount of labor hired
The extra benefit resulting from a small increase in an activity is called the
A) opportunity cost. B) marginal benefit. C) diminishing returns of the activity. D) marginal cost.
Allocative efficiency involves which of the following?
a. Producing the optimal quantity of some output for a society b. Selling the minimum number of goods that a society demands c. Selling the most amount of goods at the highest sustainable price d. Producing at a level that maximizes profits and minimizes costs
Assume the central bank pursues contractionary monetary policy. What is the first round effect on the value of the domestic currency, if there is low mobility in the international capital markets?
a. The value of the currency rises. b. The value of the currency falls. c. The value of the currency is unaffected. d. The change in the value of the currency is ambiguous.