b. establishes cause-and-effect relationships between economic variables. c. is based on value judgments. d. can never be used to make predictions. 2. If the efficient output of a good is produced each week, then the: a. marginal social benefit of the good equals its marginal social cost each week. b. marginal social benefit of the good is at a maximum. c. total social benefit of the good is at a maximum. d. total social benefit of the good equals its total social cost.
3. If the marginal social benefit of a good exceeds the marginal social cost at the current monthly output, then: a. it will be possible to make buyers of the good better off without harming sellers of the good.
b. it will be possible to make sellers of the good better off without harming buyers of the good.
c. either( a) or( b) d. a reduction in monthly output will be required for efficiency.
4. The marginal social cost of bread exceeds the marginal social benefit at the current weekly output. Therefore,
a. the marginal net benefit of bread is positive. b. the output of bread is efficient. c. a reduction in weekly output of bread is necessary to achieve efficiency. d. an increase in weekly output of bread is necessary to achieve efficiency.
5. The total social benefit of automobiles equals the total social cost at current annual output. Then it follows that:
a. the annual output of automobiles is efficient. b. the annual output of automobiles exceeds the efficient amount.