In the above figure, when 2000 bicycles are produced each month, we can see that
A) the marginal benefit from another bicycle is greater than the marginal cost of another bicycle.
B) more bicycles should be produced to reach the allocatively efficient level of output.
C) the economy is very efficient at the production of bicycles because the marginal benefit exceeds the marginal cost.
D) Both answers A and B are correct.
D
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A stock market crash which causes stock prices to fall should cause
A) an increase in wealth. B) an increase in consumption spending. C) no change in consumption spending. D) a decrease in consumption spending.
The incidence of a tax refers to
a. who receives the benefits from the revenue generated by the tax b. the changes in the marginal tax rate as income increases c. whether the tax is regressive, proportional, or progressive d. who bears the burden of the tax e. whether the tax is based on the ability-to-pay principle