A market equilibrium might not maximize total economic surplus because:
A. in a market equilibrium individuals do not exploit all opportunities for individual gain.
B. in a market equilibrium individuals do not act rationally.
C. efficiency is not an important social goal.
D. sometimes goods entail costs and benefits that do not fall on buyers and sellers.
Answer: D
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Congress commissioned a study to determine what the poverty level or minimum level for subsistence should be for the U.S. population. What branch of economics does this represent?
A) Normative economics B) Positive economics C) Microeconomics D) Macroeconomics
A graph that shows the maximum combinations of two goods which a consumer can purchase with a given money income is:
A. The production possibilities curve B. An indifference curve C. A demand curve D. A budget line