7 . If the marginal social benefit of smoke detectors exceeds its marginal social cost , then additional net gains are possible from an increased annual smoke detector production .
8 . Monopoly power causes losses in efficiency because the marginal social benefit of output exceeds its marginal social cost at the monopoly output .
9 . Government regulations that require airlines to serve routes for which the maximum price that passengers are willing to pay for a trip fall short of the minimum price that sellers are willing to accept are likely to cause losses in efficiency .
10 . Points lying below a utility possibility curve are efficient .
11 . Government programs can achieve efficiency when the gains to gainers from those policies exceed the losses to those who bear the costs .
12 . If the marginal social cost of beer production exceeds its marginal social benefit , then more than the efficient about of beer is being produced .
13 . Efficient outcomes are often viewed as inequitable .
14 . If it is not possible to make someone better off without harming another , then resource allocation is efficient .
15 . Compensation criteria are used to argue that changes in resource allocation should be made if the gains to some groups outweigh the losses to others , even though compensation for losses is not actually made .
16 . All points on a utility possibility curve are efficient but differ in terms of the distribution of well-being .
17 . A tax on a product shifts the demand curve .
18 . A government subsidized price for a commodity that is higher than the market driven price results in oversupply relative to the efficient allocation .
19 . When comparing the allocation of two goods relative to two consumers with individual utility functions , multiple points of Pareto efficiency can exist .
Multiple Choice Questions 1 . Positive economics : a . makes recommendations designed to achieve certain goals .