For a firm to be economically efficient from society's point of view, it should produce to the point at which
A) marginal cost equals marginal revenue.
B) marginal cost equals average total cost.
C) marginal cost equals price.
D) average total cost equals price.
C
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What is/are the central argument(s) against tariffs?
(a) They redistribute income away from consumers who are paying higher prices because of the tariffs. These rents are given to the individual industries that are protected by the tariffs and are operating inefficiently. (b) A laissez-faire economy is the American way. (c) They protect the wealthy. (d) They benefit only fast-growing industries.
The price of a phone call at a pay phone was 5 cents in 1950 and the price of a first-class stamp was 3 cents. In 2014, the pay phone costs 50 cents for a call and a first-class stamp costs 49 cents. We know that
A) both the nominal and the relative price of phone calls increased from 1950 to 2014. B) both the nominal prices of phone calls and first-class stamps increased from 1950 to 2014, but the relative price of stamps increased and the relative price of phone calls decreased from 1950 to 2014. C) all prices increased from 1950 to 2014: Nominal prices of phone calls, first-class stamps, and the relative prices of phone calls and first-class stamps. D) both the nominal prices of phone calls and first-class stamps increased from 1950 to 2014, but we can't tell if the relative prices increased or decreased without more information.