If the marginal utility of a gallon of milk to consumers is $2.50 and the MC of producing the gallon of milk is $1.50, then
a. the value of the resources used up in producing one more gallon of milk would be $1 less than the money value of the additional gallon to consumers.
b. society could be made better off by expanding the output of milk.
c. resources are not being used most efficiently.
d. All of the above are true.
d
You might also like to view...
A decrease in the demand for eggs results in a surplus of eggs at the original equilibrium price. Explain how market forces will act to eliminate the surplus
What will be an ideal response?
In Country Z, the government simultaneously decreases its expenditures by $20 billion and decreases taxes by $20 billion. If the MPS is equal to 0.2, the government's action ________ real GDP by ________
A) decreases; $100 billion B) decreases; $20 billion C) decreases; $80 billion D) has no effect on; $0