To determine how much of a good to produce to achieve allocative efficiency, we
A) construct a production possibilities frontier and choose the midpoint.
B) construct a production possibilities frontier and choose any point on it.
C) must produce on the PPF and at the point where the marginal benefit and marginal cost of the good are equal.
D) must produce on the PPF and at the point where the marginal benefit exceeds by any amount the marginal cost of the good.
E) must produce on the PPF and at the point where the marginal benefit exceeds by as much as possible the marginal cost of the good.
C
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In the above figure, which of the figures show(s) a relationships between x and y with a positive slope?
A) Figure D only B) Figure A and Figure B C) Figure C only D) Figure B and Figure C E) Figure A and Figure D
A price ceiling might be an appropriate government response to a
a. period of falling farm prices due to unusually good harvests b. substantial increase in farm productivity due to marked applications of new technology in agriculture c. national security crisis leading to major shortages of essential goods d. period of extraordinary large surpluses of farm goods e. good in which the demand is considerably less than the supply