In a market, a distortion does not exist if
A. the social marginal benefit is less than the social marginal cost.
B. the social marginal benefit is equal to the social marginal cost.
C. the social marginal benefit is greater than the social marginal cost.
D. the private marginal benefit is greater than the social marginal benefit.
Answer: B
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A shift of the U.S. demand curve for Mexican pesos to the left and a decrease in the peso price per dollar would result from
a. an increase in the U.S. inflation rate relative to the rate in Mexico. b. a change in U.S. consumers' tastes away from Mexican products and toward products made in South Korea, India, and Taiwan. c. U.S. buyers perceiving that domestically - produced products are of a lower quality than products made in Mexico. d. all of the above answers are correct.
As output increases, total fixed cost
a. increases. b. remains constant. c. rises and then falls. d. falls and then rises.
The rate of return on capital is
A) much higher in rich countries than in poor countries. B) much lower in rich countries than in poor countries. C) not substantially higher in poor countries than in rich countries. D) not substantially higher in rich countries that in poor countries.
Given a demand curve, explain how total revenue may be calculated.
What will be an ideal response?