Refer to the supply and demand graph below for a public good. Point c on the graph shows where the:
A. Total benefit equals the total cost of the public good
B. Marginal benefit equals the marginal cost of the public good
C. Average benefit equals the average cost of the public good
D. Total benefit of the public good is at the maximum
B. Marginal benefit equals the marginal cost of the public good
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In an unregulated competitive market, the presence of marginal external benefit from a good or service results in less than the efficient quantity being produced
Indicate whether the statement is true or false
In the Keynesian model which includes the Keynesian short-run aggregate supply curve
A) an increase in aggregate demand would causes the price level to rise, but does not change the level of real GDP. B) an increase in aggregate demand causes real GDP to rise without changing the price level. C) an increase in aggregate demand changes neither the price level nor the level of real GDP. D) an increase in aggregate demand causes real GDP and the price level to decrease.