Productive efficiency implies that
What will be an ideal response?
it is impossible to obtain gains in one area without losses in another.
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Suppose there are three power-generating plants, each of which has access to 5 different production processes. The table below summarizes the cost of each production process and the corresponding number of tons of smoke emitted each. Process(smoke/day) A(4 tons/day) B(3 tons/day) C(2 tons/day) D(1 ton/day) E(0 tons/day) Cost to Firm X ($/day) $500$514$530$555$585 Cost to Firm Y ($/day) $400$420$445$480 $520Cost to Firm z ($/day) $300$325$360$400 $550The least costly way of lowering smoke emissions from 12 tons to 9 tons per day would be for:
A. Firm X to emit 1 ton, Firm Y to emit 4 tons and Firm Z to emit 4 tons. B. each firm to reduce emissions by 1 ton, emitting 3 tons each. C. Firm X to emit 2 tons, Firm Y to emit 3 tons and Firm Z to emit 4 tons. D. Firm X to emit 4 tons, Firm Y to emit 3 tons and Firm Z to emit 2 tons.
If we observe an economy in which desired saving has changed, but there has been no change in actual investment, we may infer that ________
A) net exports have changed B) actual saving has changed C) the domestic real interest rate has not changed D) all of the above E) none of the above
If Fred's marginal rate of substitution of salad for pizza equals 5, then
A) he would give up 5 pizzas to get the next salad. B) he would give up 5 salads to get the next pizza. C) he will eat five times as much pizza as salad. D) he will eat five times as much salad as pizza.
Graphically, consumer surplus is the area:
a. above the demand curve. b. below the supply curve. c. under the demand curve and the supply curve. d. above the market supply curve and under the equilibrium price. e. under the market demand curve and above the equilibrium price.