At the market clearing price
A) there is neither a shortage nor a surplus.
B) quantity supplied equals quantity demanded.
C) the supply and demand curves intersect.
D) all of the above are correct.
D
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Refer to the figure above. The MSB curve lies to the right of the demand curve because the production of Good Y involves ________
A) positive externalities B) negative externalities C) increasing returns to scale D) decreasing returns to scale
Relative to a world in which some people are motivated by nonmaterial incentives, if all people were motivated solely by financial incentives, then:
A. economic efficiency would be achieved more often. B. there would be no commitment problems. C. both business transactions and personal interactions would be different. D. transactions in the business world would be the same, but personal interactions would not.