[Solved] If the Price of a Product Is Less Than Its

What does allocative efficiency mean? A)That a product is produced where its price is equal to its marginal costs. B)That a product is produced where its price is below its marginal costs. C)That a product is produced where its price is equal to its average costs. D)That a product is produced where its price is below its average costs.

What does the term "forces of uncompetition" refer to? A)The tendency in the market for some firms to grow larger and drive other firms out of business,thereby eroding perfect competition. B)The inability of firms to provide all the products that people want. C)The inevitable wealth and income inequalities resulting from the market. D)The tendency of governments to take over certain firms.

All the following,except one,are benefits of the perfectly-competitive market system.Which is the exception? A)It is productively efficient. B)It ensures that income is fairly distributed. C)It is allocatively efficient. D)It is a costless system.

Table 9.1,which shows the toll charges on a particular highway. -Refer to Table 9.1 to answer this question.If using the road was presently free,what toll charge would be necessary to reduce traffic by 40 percent? A)$1. B)$2. C)$3. D)$4.

Table 9.1,which shows the toll charges on a particular highway. -Refer to Table 9.1 to answer this question.If the user price was presently $1,what increase in the toll charge would be necessary to reduce traffic by 2,000 vehicles per hour? A)$1. B)$2. C)$3. D)$4.

What does the long-run equilibrium of a perfectly competitive market suggest? A)That the price is equal to the lowest SRAC but not necessarily the lowest LRAC. B)That the price is equal to the lowest LRAC but not necessarily the lowest SRAC. C)That the price is equal to both the lowest SRAC and the lowest LRAC. D)That price cannot equal marginal cost.

All of the following,except one,are benefits of perfectly competitive markets.Which is the exception? A)Competitive markets promote personal economic freedom. B)Competitive markets eliminate externalities. C)Ignoring externalities,competitive markets are productively efficient. D)Competitive markets are costless to implement. E)Ignoring externalities,competitive markets are allocatively efficient.

Which form of pollution control would one expect environmental groups to favour the most? A)Legislative controls,because of the built-in incentive firms have to reduce pollution below the required minimum. B)A pollution tax,because the producer pays all of the tax and the consumer none. C)The pollution tax,because the consumer pays all of the tax and the producer none. D)The marketing of pollution permits because the environmental group has the option of directly reducing pollution by buying permits and not using them.

Figure 9.9 shows the demand and supply of a product in a competitive market. -Refer to Figure 9.9 to answer the question.Suppose this graph represents a polluting industry and that the government wishes to decrease its output by 10 units.Which of the following will produce this result? A)Imposing an excise tax of $2. B)Imposing an excise tax of $1. C)Granting a subsidy of $2 to producers. D)Granting a subsidy of $1 to producers. E)Granting a subsidy of $2 to consumers.

Figure 9.9 shows the demand and supply of a product in a competitive market. -Refer to Figure 9.9 to answer the question.Suppose that this graph represents an industry with big external benefits and that the government wishes to increase its output by 10 units and lower its price.Which of the following will produce this result? A)Imposing an excise tax of $2. B)Imposing an excise tax of $1. C)Granting a subsidy of $2 to producers. D)Granting a subsidy of $1 to producers. E)Granting a subsidy of $2 to consumers.