Refer to the above supply and demand graph for a public good. Which one of the following statements is correct?
A. There will be an overallocation of resources at output level Q1.
B. The supply curve reflects the marginal cost and the demand curve reflects the marginal benefit of this public good.
C. There will be an underallocation of resources at output level Q3.
D. The demand curve reflects the marginal cost and the supply curve reflects the marginal benefit of this public good.
Answer: B
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As the manager of a ski resort, you want to increase the number of lift tickets sold by 8 percent. Your staff economist has determined that the price elasticity of demand for lift tickets is 2. To increase sales by the desired amount, you should decrease the price of a lift ticket by:
A. 16 percent. B. 8 percent. C. 4 percent. D. 2 percent.
Setting time limits on welfare eligibility will increase the incentive to work.
Answer the following statement true (T) or false (F)
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a. percentage of face value that the Federal Reserve is willing to pay for Treasury Securities. b. percentage of deposits that banks must hold as reserves. c. interest rate at which the Federal Reserve makes short-term loans to banks. d. interest rate at which banks lend reserves to each other overnight.
The Federal Trade Commission Act:
A. prohibited selling products at "unreasonably low prices" with the intent of reducing competition. B. was passed to establish a body to enforce antitrust laws. C. outlawed stock purchases that would substantially reduce competition. D. made it illegal to monopolize a market.