"If the marginal social benefit of a car exceeds the marginal social cost of a car, we are producing too many cars." True or false? Explain
Indicate whether the statement is true or false
False. If the marginal social benefit of a car exceeds the marginal social cost of a car, we can gain value by producing another car and we are losing value by not producing it. If the marginal social benefit exceeds the marginal social cost, producing another car yields a benefit that exceeds the cost of producing the car. So we are producing too few cars.
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A monopsony restricts the quantity of a factor demanded to force down the price of the factor and increase profits
Indicate whether the statement is true or false
If the level of government spending rises and simultaneously there is a fall in the money stock, we definitely know that
a. income will rise. b. the change in the interest rate will be ambiguous. c. income will fall. d. the interest rate will fall. e. None of the above