When social and private costs differ, economists state that
A. the society will produce inside the production possibilities frontier.
B. there will be economic profit in the society.
C. there is not an efficiency problem but an equity problem.
D. there is an externality.
Answer: D
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If the marginal cost for Dinky's Donuts to advertise one additional day each week in the local newspaper is $200, then Dinky's Donuts should advertize that additional day
A) until the marginal benefit the company receives reaches zero. B) as long as the marginal benefit the company receives each week is just equal to or greater than $200. C) as long as the weekly marginal cost does not rise. D) only if the marginal benefit the company receives each week is greater than $200 plus an acceptable profit margin.
A permanent decrease in demand for convenience store services is likely to cause which of the following in the long run?
a. an economic loss for each firm b. a higher price for each firm's output c. fewer firms in the industry d. more firms in the industry e. economic profit for each firm
The concept of elasticity is used to
a. indicate the economy's ability to rebound from a recession b. measure the robustness of a variable c. measure the sensitivity of one variable to changes in another d. measure price changes e. measure income changes
Suppose labor supply can be described as ES = 0.1w ? 1000 where w is yearly salary. What yearly salary must be paid to encourage 6000 workers to accept jobs?
A. $60,000 B. $30,000 C. $40,000 D. $50,000 E. $70,000