At the output level defining allocative efficiency:
A. the areas of consumer and producer surplus necessarily are equal.
B. marginal benefit exceeds marginal cost by the greatest amount.
C. consumer surplus exceeds producer surplus by the greatest amount.
D. the maximum willingness to pay for the last unit of output equals the minimum acceptable
price of that unit of output.
Answer: D
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If the MPC = 0.80, the tax multiplier is
A) -2. B) -4. C) -5. D) -8.
The industry that most closely approximates the conditions of the oligopoly model is:
A. restaurants. B. retail clothing. C. home construction. D. tires.
Why does the government grant patents to companies that research new drugs?
What will be an ideal response?
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point A to Point E, the opportunity cost of motorcycles, measured in terms of hybrid cars
A. remains constant. B. decreases. C. initially increases, then decreases. D. increases.