-Use the Figure Above to Answer This Question

question 103

Multiple Choice

-Use the figure above to answer this question. Suppose the economy is operating at point a. A move to __________could be explained by_________ .

• A) point c; an increase in the nominal interest rate
• B) point d; an increase in real GDP
• C) point b; an increase in real GDP
• D) point e; a decrease in the nominal interest rate

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Definitions:

Price Discrimination

An approach to pricing in which a single provider sells almost identical goods or services at varying prices across different markets.

Consumer Surplus

The variance between what consumers are prepared and can afford to pay for a product or service and the actual amount they end up paying.

Marginal Cost

The additional cost incurred from producing one more unit of a product or service.

Two-part Tariff

A pricing strategy that involves a fixed fee in addition to a variable charge for each unit of the product consumed.