The marginal cost of a vacation in the south of France is $4,500 . The marginal benefit to Madeline of a vacation in the south of France is $4,800.
a. Madeline will lose $300 if she vacations in the south of France
b. Madeline will experience a net gain of $300 if she vacations in the south of France.
c. Madeline will be worse off if she vacations in the south of France.
d. Madeline will enjoy a net gain of $4,800 if she vacations in the south of France.
b
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According to the liquidity premium theory of the term structure, a downward sloping yield curve indicates that short-term interest rates are expected to
A) rise in the future. B) remain unchanged in the future. C) decline moderately in the future. D) decline sharply in the future.
In the case of a positive externality, social marginal cost will
a. exceed private marginal cost. b. be equal to private marginal cost. c. fall short of private marginal cost. d. have no specific relation to private marginal cost.