A society must make three sorts of decision: what goods to produce, how to produce them, and how to distribute them.
Answer the following statement true (T) or false (F)
True
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Consumer surplus ________
A) equals total revenue minus marginal cost B) is maximized when the market outcome is efficient C) equals total revenue minus opportunity cost D) plus producer surplus is maximized when resources are used efficiently
In the short-run if there is a surplus in the market for a product, the rationing function of price can be expected to cause
A) an increasing shift in the demand for the product. B) a decreasing shift in the supply of the product. C) an increase in the market price of the product. D) a decrease in the market price of the product.
As unemployment rose during 1930 through 1932 and the economy plunged into the Great Depression, policy makers
a. reduced tax rates and increased the money supply. b. increased tax rates and reduced the money supply. c. increased both tax rates and the money supply. d. reduced both the tax rates and the money supply.
The business-stealing externality states that entry of a new firms imposes a cost on existing firms because they lose customers
a. True b. False Indicate whether the statement is true or false