Large projects that involve purchasing land from many landowners may not succeed due to the numerous expenses of negotiating so many different deals. These expenses, such as attorney's fees and bank fees, are examples of

"Because chips and salsa are complements, an increase in the price of chips will cause the demand for salsa to decrease

This initial shift in demand for chips results in a higher price for chips; this higher price will cause the demand curve for chips to shift to the right." Which of the following correctly comments on this statement? A) The statement is false because one cannot assume that chips and salsa are complements for all consumers. B) The statement is false because a change in the price of chips would not change the demand for chips. C) The statement will be true if consumer tastes for chips and salsa do not change. D) The statement is false because salsa is an inferior good; chips are normal goods.

A firm is producing an output such that the benefit from one more unit is more than the cost of producing that additional unit. This means the firm is:

A. producing more output than allocative efficiency requires. B. producing less output than allocative efficiency requires. C. achieving productive efficiency. D. producing an inefficient output, but we cannot say whether output should be increased or decreased.