In long-run equilibrium, the marginal social cost exceeds the marginal private cost, but the marginal social benefit is equal to the marginal private benefit. This describes which of the following markets?

Oligopoly with no externalities

Monopoly with perfect information

Perfect competition with a positive externality

Perfect competition with a negative externality

Perfect competition with asymmetric information

If the wage in a perfectly competitive labor market is $20 and the firm can sell all the output it wants at $4 per unit, then the marginal product of the last worker employed must be

5 units

16 units

24 units

80 units

indeterminate

What is the most likely goal of a government that enacts a lump-sum subsidy?

To increase market competition

To correct for a positive externality

To correct for a negative externality

To encourage production of private goods

To increase profit and encourage production

Which of the following describes a situation where the marginal social benefit is greater than the marginal private benefit at equilibrium?

Oligopoly

Monopoly

Positive externality

Allocative efficiency

Negative externality

Which of the following policies will most likely help a government to achieve a goal of reducing the wealth gap between those with great wealth and those with no wealth?

Increasing the interest rate on bank loans

Switching from a regressive tax system to a progressive tax system

Lowering taxes on income from interest earned on investments

Increasing the nation's per capita income

Encouraging actions that yield increased returns to entrepreneurs

A price-taking firm evaluates its production costs and revenue and decides it will operate in the short run and can stay in the market in the long run without conditions changing. Which of the following must describe the firm's short-run production?

Average variable cost > Price < Average total cost

Average variable cost = Price = Average total cost

Average variable cost < Price < Average total cost

Price Average total cost

Price > Average total cost

If the price of Good A goes down by 5 percent and the quantity demanded of Good B goes down by 5 percent, which of the following is true?

Both goods have unit elastic supply.

The goods are complements, and the cross-price elasticity is 1.

The goods are substitutes, and the cross-price elasticity is 1.

The goods are complements, and the cross-price elasticity is 1.

The goods are substitutes, and the cross-price elasticity is 25.