The above figure shows the marginal social benefit and marginal social cost curves of doughnuts in the nation of Kaffenia. What is the marginal social cost of producing the 200th dozen doughnuts each day?
A) 10.00 per dozen
B) 8.00 per dozen
C) 6.00 per dozen
D) 4.00 per dozen
Ques. 2One reason why soda companies are so fervently against this tax might be because they assume sellers will pay the entire tax. Sellers will pay the entire tax if
A) demand is perfectly inelastic.
B) the price elasticity of demand is between zero and 1.
C) demand is unit elastic.
D) demand is perfectly elastic.
Ques. 3Comparative advantage is
A) the ability to perform an activity at a lower opportunity cost than anyone else.
B) the ability to perform an activity at a higher opportunity cost than anyone else.
C) the ability to perform an activity at a zero opportunity cost.
D) another name for absolute advantage.
Ques. 4The cost of producing an additional unit of a good or service that falls on people other than the producer of that good or service is the
A) marginal external cost.
B) marginal private cost.
C) marginal social cost.
D) None of the above answers is correct.
Ques. 5If a good is inferior, its income elasticity will be
A) 0.
B) 1.0.
C) negative.
D) positive.
Ques. 6Consider a BMW automobile plant. If the price of BMWs increase by 10 percent and the money wage rate and other costs ________, there will be ________.
A) increase by 10 percent; an increase in BMWs profits
B) do not change; an increase in BMW's production and profit
C) increase by 10 percent; an increase in BMWs production
D) do not change; no change in production
Ques. 7Last Tuesday you purchased 100 shares of Jitters Coffee Company, a corporation, for 25.00 per share. Unfortunately, the company went bankrupt later that same day.
If the company still owed 1 million in debts after all assets have been liquidated and there are 1 million stockholders, what would be your personal loss from the remaining debt? A) 0
B) 1.00
C) 100.00
D) 1 million
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