To enhance social welfare, the government should encourage the production of
a. all goods
b. no goods
c. goods that provide positive externalities
d. goods whose social cost exceeds their private cost
e. goods that provide negative externalities
C
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The following graph is the production possibilities frontier of a nation:
The opportunity cost of the fourth unit of bread is
A. 3 drill presses. B. 4 drill presses. C. 1 drill press. D. 0 drill presses.
The used car market has a significant amount of adverse selection because
A) the seller knows more about the car than the buyer. B) the buyer can easily find out more about the car than the seller. C) buyers and sellers rarely have enough information. D) the transaction costs of the used car market are prohibitive.
To answer the next question, use the following graph showing the domestic demand and supply curves for a specific standardized product in a particular nation.
If the world price of this product is $1, this nation will
A. export all of the product. B. import all of the product. C. import some of the product and produce some of the product domestically. D. neither export nor import the product.
Refer to the accompanying figure. The marginal utility of the 6th pizza is:
A. 17.5 B. 100 C. 95 D. 5