If the Price of a Commodity Is Above Marginal Cost

question 35

Multiple Choice

If the price of a commodity is above marginal cost, then the economy will tend to

• A)overproduce the item.
• B)underproduce the item.
• C)produce the optimal amount of the item.
• D)overproduce and underproduce the item cyclically.

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Definitions:

Modesty

Modesty is the quality of being unassuming or moderate in the estimation of one's abilities and achievements.

Personality

The grouping of traits that form the distinctive personality of an individual.

Fixation

An obsessive interest or feeling that may lead to an inability to adapt to different situations.

Superego

In psychoanalytic theory, the part of a person's mind that acts as a self-critical conscience, reflecting social standards learned from parents and teachers.