A deadweight loss of consumer and/or producer surplus occurs when:
a. producers fail to maximize profits.
b. mutually beneficial transactions cannot be completed.
c. consumers do not maximize their utility.
d. the price of inputs increases.
b
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Refer to the figure above. Which of the following combinations is attainable as well as efficient?
A) B B) C C) D D) E
Although national defense is currently a public good, economists who advocate small government generally agree that the U.S. should privatize national defense to increase the efficiency of the good
a. True b. False Indicate whether the statement is true or false
When the price of a good rises, the price is transmitting information indicating that the good has become relatively
A) scarcer. B) less scarce. C) more plentiful in supply. D) b and c
Assuming that Figure 7.1 is a market for money that can be borrowed or saved, Box 1 is 
A. "$*" for the equilibrium amount borrowed/saved. B. "r*" for equilibrium interest rate. C. "r" for interest rate. D. "$" for the amount borrowed/saved.