While waiting in line to buy two tacos at 80 cents each and a medium drink for 90 cents, Kayla notices that the restaurant has a value meal containing three tacos and a medium drink all for $3 . For Kayla, the marginal cost of the third taco would be
a. zero.
b. 50 cents.
c. 80 cents.
d. $1.
B
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Which of the following would be accounted for by real GDP per capita, but not by real GDP?
a. Even though a country’ s nominal GDP has increased, its economy has declined. b. A country has an inflation rate of 50 percent from 2010 to 2015. c. The population of a country increases 30 percent in five years. d. A country has an economic downturn from 2000 to 2010.
In a competitive market, a negative externality creates a deadweight loss because
A) the cost of the externality is double counted. B) a harm is generated. C) price equals social marginal cost. D) price equals private marginal cost.
In a labor-market separating equilibrium with high-skill and low-skill workers and where a costly educational degree is used solely as a signal device, we can say that
A) education is socially inefficient because it is costly and provides no useful skills to the worker. B) education is socially efficient. C) education is privately inefficient for high-skill workers. D) education is privately useful for low-skill workers only.
John is trying to decide whether to expand his business or not. If he continues his business as it is, with no expansion, there is a 50 percent chance he will earn $100,000 and a 50 percent chance he will earn $300,000. If he does expand, there is a 30 percent chance he will earn $100,000, a 30 percent chance he will earn $300,000 and a 40 percent chance he will earn $500,000. It will cost him $150,000 to expand. John expects the value of his earnings to be ________ if he expands and ________ if he does not expand.
A. $320,000; $200,000 B. $170,000; $50,000 C. $120,000; $200,000 D. $30,000; $200,000