The MB curves in the diagram slope downward because of the law of
What will be an ideal response?
diminishing marginal utility.
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In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices. B. lower prices. C. lower output. D. None of these is true.
An increase in U.S. prices relative to prices in foreign countries will
A. increase U.S. imports and decrease U.S. exports. B. decrease U.S. imports and increase U.S. exports. C. decrease both U.S. exports and imports. D. increase total planned spending on U.S. goods and services.
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.
Refer to the accompanying figure. If this economy is currently producing at point C, then the opportunity cost of providing 100 additional units of medical care would be:
A. 100 warheads. B. 400 warheads. C. 800 warheads. D. 200 warheads.