The cost of producing an additional unit of a good or service that falls on people other than the producer is the marginal
A) external cost.
B) private cost.
C) social cost.
D) social benefit.
E) None of the above answers is correct.
A
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According to Keynes, if private sector demand is insufficient to maintain full employment, the government should: a. make the economy's natural transition to a lower level of employment as easy as possible. b. shock the economy with an increase in aggregate demand
c. reduce aggregate supply to reduce inflation. d. print money to promote consumer spending. e. take steps to increase aggregate supply in an economy.
If a decision maker uses marginal analysis, then the relevant costs are the
a. full costs of a particular activity or product. b. fixed costs which do not vary with the extra activity or output. c. profits obtained on the activity or product. d. average costs for a particular activity or product. e. additional costs of a particular activity or product.
Figure 4-21
A surplus will tend to occur at which price in Figure 4-21?
a.
P1
b.
P2
c.
P3
Keynesians
A. believe capitalism is inherently stable. B. contend that government intervention in the economy is undesirable. C. advocated a laissez faire policy. D. believe wages and prices are inflexible downward.