Refer to the figure above. What is the absolute value of the arc elasticity of demand when the price decreases from $5 to $2?

Marcus sells 300 candy bars at $0.50 each. His total costs are $125. His profits are

A. $25. B. $124.50. C. $125. D. $150.

If the U.S. inflation rate increases unexpectedly and government revenues, expenditures, and nominal interest rates remain unchanged:

A. both the U.S. real and nominal budget deficits decreases. B. only the U.S. real budget deficit increases. C. both the U.S real and nominal budget deficits increases. D. only the U.S. real budget deficit decreases.