Author Question: In the figure above, suppose the original budget line is BD. A fall in the price of a compact disc ... (Read 54 times)

shofmannx20 · **on:** Jun 29, 2018

In the figure above, suppose the original budget line is BD. A fall in the price of a compact disc will

A) rotate the budget line to AD.
B) rotate the budget line to CD.
C) not move the budget line.
D) result in a parallel leftward shift of the budget line.

Question 2

The above figure shows the marginal social benefit and marginal social cost curves of coffee in the nation of Kaffenia. Producing and consuming the efficient quantity of coffee in Kaffenia means that

A) the marginal social cost of the last pound of coffee is at the lowest possible value.
B) the marginal social benefit of the last pound of coffee is at its highest possible value.
C) to produce more coffee, the marginal social benefit of an additional pound of coffee is less than its marginal social cost.
D) All of the above are correct.