The above figure shows the marginal social benefit, marginal private cost and marginal social cost of producing steel. What is the efficient quantity of steel?
A) 0 tons
B) 2 tons
C) 4 tons
D) 8 tons
B
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"Last October, due to an early frost, the price of a pumpkin increased by 10 percent compared to the price in the previous Halloween season. As a result, the quantity demanded county-wide decreased from 2 million to 1.5 million"
Based on this statement, it is certain that the A) demand curve for Halloween costumes shifted leftward. B) price elasticity of demand for pumpkins decreased from its value in previous years. C) demand curve for pumpkins shifted leftward. D) total revenue from the sale of pumpkins decreased.
In the tourist-trap model, a consumer might pay more than the marginal cost for a good sold in a competitive market because
A) the consumer is not free to search for lower prices. B) souvenir stores are part of a nationwide cartel. C) the cost of searching for a cheaper good is more than the markup over the marginal cost. D) the difference in prices between stores will be smaller than the search cost.