An outcome is socially optimal if it:
A. maximizes total economic surplus.
B. is determined by the government.
C. leaves no unexploited opportunities for individuals.
D. is an equilibrium outcome.
Answer: A
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If the industry in the above figure was perfectly competitive, the level of output would
A) be less than the single-price monopoly level of output. B) be the same as the single-price monopoly level of output. C) exceed the single-price monopoly level of output by 20 units per day. D) exceed the single-price monopoly level of output by 60 units per day.
If people follow the rule of rational choice they will choose options that they think will:
a. create more average benefits than average costs b. create more additional costs than additional benefits c. create equivalent additional benefits and additional costs d. create more additional benefits than additional costs