Suppose a country produces only bikes and clothing. The country achieves an efficient allocation of resources when
A) it can't produce any more bikes unless it gives up clothing.
B) it produces equal amount of bikes and clothes.
C) the marginal social benefit of producing a bike equals the marginal social cost of producing a bike.
D) the prices charged for the goods are as low as possible.
C
You might also like to view...
Erik can work as a forest ranger, where the probability of being killed in a work-related accident is 1/6,000, or he can earn an additional $800 a year by working as a game warden,
where the probability of being killed in a work-related accident is 3/6,000. Using the compensating differential approach and the above information, what is the value of Erik's life? A) $1.6 million B) $2.4 million C) $3.2 million D) $4.8 million
If an individual consumes more of Good X when his/her income doubles, we can infer that
A. Good X is an inferior good. B. the demand for Good X is perfectly inelastic. C. the individual is highly sensitive to changes in the price of Good X. D. Good X is a normal good.