The above figure shows the marginal social benefit and marginal social cost curves of chocolate in the nation of Kaffenia. What is the marginal social cost of producing the 250th pound of chocolate each day?
A) $625.00 per pound
B) $2.50 per pound
C) $1.00 per pound
D) $0.50 per pound
B
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You borrow at a nominal interest rate of 10 percent. If the inflation rate is 4 percent, then the real interest rate is
A) 6 percent. B) 14 percent. C) the $10 in interest you have to pay. D) 16 percent. E) 2.5 percent.
At all the points above the midpoint on a linear demand curve, the value of price elasticity of demand is:
A) equal to one. B) zero. C) greater than one. D) less than one.
Which of the following explains why deflation is bad for consumers?
a. It reduces the purchasing power of money b. It precedes a long recession. c. It creates a spike in unemployment. d. It makes financial decision making more difficult.
A monopolistically competitive firm faces a downward-sloping demand curve.
Answer the following statement true (T) or false (F)