Explain how economists determine whether a government program should be reduced or eliminated
Please provide the best answer for the statement.
Economists determine whether a program should be reduced or eliminated by comparing the marginal benefit of the program to the marginal cost. If the marginal cost is greater than the marginal benefit the program should be reduced up to the point at which the marginal cost is equal to the marginal benefit. If the program marginal cost is above the marginal benefit at all levels of production, the program should be completely eliminated.
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Consider the following short-run production function: q = 5L2 - 1/3 L3. At what level of L do diminishing marginal returns begin? At what level of L do diminishing returns begin?
What will be an ideal response?
Economists speaking like scientists make
a. positive statements. b. prescriptive statements. c. claims about how the world should be. d. More than one of the above is correct.