Assume That the Supply Curve Is Horizontal Because Marginal Cost

question 71

Multiple Choice

Assume that the supply curve is horizontal because marginal cost is constant at $10.John,Robert,and Jimmy each value one compact disc at $20 but only Jimmy and John value a second compact disc (Jimmy at $5 and John at $15) .If a social planner dictates that five compact discs be produced and distributed to John,Robert,and Jimmy,then even if the compact discs are allocated based on demand,this market will lose out on $___ of value.

• A) $5.
• B) $10.
• C) $15.
• D) There will be no lost value as five compact discs is the efficient level..

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Definitions:

Codons

Sequences of three DNA or RNA nucleotides that correspond to a specific amino acid or stop signal during protein synthesis.

tRNA

Transfer RNA, a type of RNA molecule that helps decode a messenger RNA (mRNA) sequence into a protein during the process of translation.

mRNA

Messenger RNA, a type of RNA that conveys genetic information from DNA to the ribosome, where they specify the amino acid sequence of the protein products of gene expression.

Microvilli

Microscopic cellular membrane protrusions that increase surface area for absorption, particularly in the intestines.