Explain the difference between marginal cost and marginal benefit
What will be an ideal response?
Marginal benefit is the benefit someone in society obtains when another unit of a good or service is produced. Marginal cost is the cost to someone in society of producing another unit of a good or service.
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If the CPI for this year is 220 and the CPI for last year was 215, the inflation rate is
A) just over 2 percent. B) 5 percent. C) just over 5 percent. D) 10 percent.
Stock prices change when
A) expectations are based on past performance B) expectations change. C) accounting profits are zero. D) none of these choices.
Refer to the above figure for the corn market. The government wants to set an effective price support in the corn market. To be effective the price should be set
A. at P2. B. at P1. C. at P3. D. below P1.
Governments, like individuals, businesses, and entire economies face resource and spending limits. Over the very long run, the limits mean that
A) spending must be paid for by income or revenue and not by more debt B) spending now must be paid for by income or revenue now C) the debt to gdp ratio must be zero D) spending must eventually decrease if running a budget deficit