What condition must be satisfied so that society is producing the efficient mix of output? Why does this condition guarantee efficiency?
What will be an ideal response?
It must be the case that price equals marginal cost for all products. This condition guarantees efficiency because products are produced up to the point where the social value of the marginal unit of the good just equals the cost of the marginal units of resources used to produce it.
Economics
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Refer to Figure 17-9. A supply shock, such as rising oil prices, would be depicted as a movement from
A) C to B to A. B) C to D to A. C) A to B to C. D) A to D to C. E) C to E to B.
Economics
If your income increases from $30,000 to $40,000 and your savings increases from $2,000 to $4,000 . your marginal propensity to save (MPS) is:
a. 0.2. b. 0.4. c. 0.5. d. 0.8. e. 1.0.
Economics