The socially efficient level of output is determined where
a. marginal social cost equals marginal social benefit
b. marginal private cost equals marginal social benefit
c. average social cost equals average social benefit
d. average private cost equals average social benefit
e. total social cost equals total social benefit
A
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In the classical model, the factors determining output and employment are the factors that ascertain the position(s) of
a. the labor supply curve only. b. the labor demand curve only. c. the aggregate production function. d. both the labor supply curve and the labor demand curve. e. Both c and d
The law of comparative advantage indicates that
a. specialization and exchange will permit trading partners to maximize their joint output. b. a nation can gain from trade only if it is not at an absolute disadvantage in producing all goods. c. a nation can gain from trade only when its trading partners are not low-wage countries. d. countries should export products for which they are high-opportunity cost producers.