Scenario 10-1 The Demand Curve for Gasoline Slopes Downward and the Supply

question 394

Multiple Choice

Scenario 10-1
The demand curve for gasoline slopes downward and the supply curve for gasoline slopes upward. The production of the 1,000^th gallon of gasoline entails the following:
• a private cost of $3.10;
• a social cost of $3.55;
• a value to consumers of $3.70.
-Refer to Scenario 10-1. Let Q represent the number of gallons of gasoline and let P represent the price of a gallon of gasoline. Which of the following statements is correct?

• A)One point on the social-cost curve is (Q = 1,000, P = $0.45).
• B)One point on the supply curve is (Q = 1,000, P = $3.10).
• C)One point on the demand curve is (Q = 1,000, P = $3.55).
• D)The socially optimal quantity of gasoline is less than 1,000 gallons.

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Definitions:

Mescaline

A psychedelic alkaloid of the phenethylamine class, known for its hallucinogenic effects on humans, primarily found in the peyote cactus.

Heroin

An opioid drug derived from morphine, highly addictive and illegal in many countries, used for its euphoric effects.

Zoopharmacognosy

Behavior in which non-human animals self-medicate.

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The process of managing and overseeing the operations of an organization or institution, or the execution of policies and decisions.