The marginal benefit and marginal private cost curves for aphrodisiacs are given as follows:
MB = 200 - Q MPC = Q
In addition to private costs, there is a marginal external cost of $10 per unit of output. What is the efficient level of output?
A) 0
B) 55
C) 95
D) 100
E) none of the above
C
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Which of the following statements is true?
A) If the opportunity costs differ between two countries, there is no opportunity for mutually advantageous trade. B) International trade leads countries to specialize in the production of those goods for which they have an absolute, rather than a comparative, advantage. C) Free international trade can increase the availability of all goods and services in the countries that participate in trade. D) The potential costs of free trade generally outweigh the benefits.
At the current price of a good, Al's consumer surplus equals 8, and Ben's consumer surplus equals 15. By using two-part pricing, a monopolist could increase his profit by
A) 8. B) 16. C) 15. D) 30.