You observe that at your current production of lunch boxes, the average total cost of producing lunch boxes is $5 and the marginal cost of producing lunch boxes is $2. What should always happen if you increase lunch box production?

If the nominal money supply grows 6%, real income rises 2%, and the inflation rate is 5%, then the income elasticity of money demand is

A) 0.5. B) 0.75. C) 1.0. D) 1.5.

An important assumption in the theory of public choice is that

A) individuals will act within the political process to maximize their individual well-being. B) individuals will act within the political process to maximize their collective well-being. C) individuals will only operate outside the political process when their well-being is involved. D) scarcity does not exist in the government sector.