Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. At an output of 30,000 units
A) the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently low.
B) producers should raise the price to $3 in order to sell the quantity demanded of 30,000.
C) the marginal cost of iced tea is greater than the marginal benefit; therefore, output is inefficiently high.
D) the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently high.
C
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The economic principle that "unemployment rate will tend to increase as the economy moves into a recession" is an example of:
A. A normative statement B. An assumption C. A loaded terminology D. A generalization
Arrow's impossibility theorem is not relevant to modern analysis of political economy.
A. True B. False C. Uncertain