The Diagram Below Shows Demand and Supply Curves for Some

question 35

Multiple Choice

The diagram below shows demand and supply curves for some perfectly competitive market.
FIGURE 16-2
-Refer to Figure 16-2.Suppose that the marginal benefit curve (MB) includes all social benefits and that there are no externalities in production.In this case, ________ for allocative efficiency.

• A)P1 and Q1 are appropriate
• B)the price P1 is appropriate but the quantity Q1 is too low
• C)the price P1 is appropriate but the quantity Q1 is too high
• D)the price P1 is too low but the quantity Q1 is appropriate
• E)the price P1 is too high but the quantity Q1 is appropriate

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Definitions:

Cognitivism

A theory in psychology that emphasizes mental processes such as thinking, memory, problem solving, and language, seeing them as central to understanding human behavior.

Behaviorism

A psychological approach that emphasizes the study of observable behaviors rather than internal mental states, and the effects of environmental stimuli on those behaviors.

Animal Intelligence

The capacity of animals to process information, learn from experience, solve problems, and adapt to their environments.

Vertebrates

Animals with a backbone or spinal column, including mammals, birds, reptiles, amphibians, and fish.