If the marginal benefit of a good is less than its marginal cost, then the nation should:
A. Produce more of that good
B. Maintain the current level of production of that good
C. Reduce the marginal benefit of that good
D. Reduce the production of that good
Answer: D
You might also like to view...
The Coase theorem holds well in situations where information and transaction costs are substantial
a. True b. False Indicate whether the statement is true or false
Refer to the diagram. The initial aggregate demand curve is AD 1 and the initial aggregate supply curve is AS 1 . In the long run, the aggregate supply curve is vertical in the diagram because:
A. nominal wages and other input prices are assumed to be fixed.
B. real output level Q f is the potential level of output.
C. price level increases produce perfectly offsetting changes in nominal wages and other input prices.
D. higher-than-expected rates of actual inflation reduce real output only temporarily.