Assume that the price overestimates the value that society places on the flu vaccine. If firms produce where P = MC, firms will be producing ________ the socially efficient amount of flu vaccine.
A. more than
B. less than
C. exactly
D. sometimes more than and sometimes less than
Answer: A
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"Cheap foreign wages" is a poor argument for protection because it fails to recognize the importance of productivity. Which of the following does NOT contribute to increasing productivity?
A) Education and training B) Government subsidies C) Infrastructure D) Capital
The shape of the production possibilities curve in the above figure indicates that
A) production of corn is characterized by increasing costs while the production of cloth is characterized by decreasing costs. B) production of both corn and cloth is characterized by increasing costs. C) production of both corn and cloth is characterized by constant costs. D) production of corn is characterized by constant costs and the production of cloth is characterized by increasing costs.