Marginal cost pricing in competitive markets results in all but which one of the following?
A. Maximization of consumer utility.
B. An efficient mix of goods and services being produced.
C. Output being produced where price equals the opportunity cost of the last unit being produced.
D. The information necessary for consumers to make rational choices between alternative goods and services.
Answer: A
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Refer to Table 4-4. If a minimum wage of $9.50 an hour is mandated, what is the quantity of labor supplied?
A) 390,000 B) 380,000 C) 370,000 D) 340,000
Consider a consumer who purchases two goods, X and Y. If the price of good Y falls, then the substitution effect by itself will
a. cause the consumer to buy more of good Y and less of good X. b. cause the consumer to buy more of good X and less of good Y. c. not affect the amount of goods X and Y that the consumer buys. d. result in an upward-sloping demand for good Y if the substitution effect is positive.