An economy is operating with optimum efficiency if
A. the price of the product is greater than marginal cost.
B. the production of more of commodity A entails the production of less of commodity B.
C. marginal cost of output is greater than marginal utility of output.
D. an increase in output would result in a decrease in average cost per unit.
Answer: B
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Which of the following would cause both the equilibrium price and equilibrium quantity of oysters (assume that oysters are a normal good) to decrease?
A) an oil spill that sharply reduces oyster output B) a decrease in consumer income C) a technological advancement in the production of oysters D) an increase in consumer income
The consumption function shows the relationship between consumption and:
a. interest rates. b. saving. c. price level changes. d. disposable income.