Refer to Figure 9.1. If the market is in equilibrium, the consumer surplus earned by the buyer of the 1st unit is ________
A) $5.00
B) $15.00
C) $22.50
D) $40.00
D
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Use the above table. When real disposable income is $125
A) APC = 0.80. B) MPS = 0.96. C) APS = 0.20. D) APC = 0.96.
The stated interest rate on a loan is the
A) nominal interest rate. B) real interest rate. C) actual inflation rate. D) expected inflation rate.
If Ann's utility function is U = 3W0.5, and she invests in a business which can yield $6,400 with probability 1/5, and $3600 with probability 4/5, then her Arrow-Pratt measure of risk aversion is
A) 0.5/w. B) 1/w. C) 1.5w. D) 3/w.
When a firm has an accounting profit that is negative, it
A) will never produce output, even in the short run. B) may still have economic profit. C) has total revenue that is less than total cost. D) cannot be producing where price equals marginal cost.