The above figure shows the marginal social benefit and marginal social cost curves of coffee in the nation of Kaffenia. For a consumer, the price they are willing to pay for each additional pound of coffee is
A) always less than the economy's marginal social cost of producing that additional pound.
B) equal to their own marginal benefit from consuming that additional pound.
C) equal to their consumer surplus.
D) Both answers B and C are correct.
B
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In new Keynesian theory, the pattern of inflation exhibited by an economy with growing aggregate demand known as inflation dynamics is
A) initially sluggish upward adjustment of the price level and inflation in response to higher aggregate demand followed by higher inflation in the future. B) initially sluggish downward adjustment of the price level and inflation in response to higher aggregate demand followed by lower inflation in the future. C) initially speedy upward adjustment of the price level and inflation in response to higher aggregate demand followed by lower inflation in the future. D) initially speedy upward adjustment of the price level and inflation in response to higher aggregate demand followed by higher inflation in the future.
Since 1990, a major industrial country with the lowest growth rate in per capita GDP has been _____
a. West Germany b. Italy c. The United States d. Great Britain e. Canada