Situation 35-2 ​

question 18

Multiple Choice

Situation 35-2
​
Dan and Ann live in the same community and both can participate in two activities, producing and stealing.
-Refer to Situation 35-2. If Dan's MB/MC ratio for producing is currently greater than his MB/MC ratio for stealing, then he will

• A)steal more and produce less.
• B)steal less and produce less.
• C)produce more and steal more.
• D)produce more and steal less.

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Definitions:

Current Price

The price at which a good or service is being sold in the market at the present moment.

Excess Supply

A situation in the market where the quantity of a good offered by producers exceeds the quantity demanded by consumers at a given price, leading to surplus.

Binding Price Floor

A price floor established by the government that exceeds the market equilibrium price, resulting in an excess supply of products or services.

Market Outcome

is the result of economic activities within a market, determined by the interaction of supply and demand.