Raul borrowed $1,000 from Marta for a year and agreed to repay her $1,050 at the end of the year. If the inflation rate was 3 percent, which of the following is the real rate of interest Marta received?

In the figure above, if the firm is regulated using an average cost pricing rule, the consumer surplus created is equal to the area of

A) ABG. B) BEFG. C) BCFG. D) BCE. E) None of the above because there is no consumer surplus created.

A firm will increase its spending on advertising until

A) it has monopolized the market. B) it has deterred all future entry. C) the marginal benefit of advertising is zero. D) the marginal benefit of advertising equals the marginal cost of advertising.