The Marginal Social Cost of Producing the Last Unit of a Good

question 76

Multiple Choice

The marginal social cost of producing the last unit of a good is $1.10,while the consumers' willingness to pay for the last unit is $0.80.The deadweight loss from the production of the last unit of the good is ________.

• A) $1.10
• B) $1.90
• C) $0.50
• D) $0.30

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Definitions:

Nominal Rate

The advertised or stated rate of interest, not including the effects of inflation or compounding.

RRSP

Registered Retirement Savings Plan, a savings and investment vehicle for Canadians to save for retirement in a tax-efficient way.

Compounded Rate

The rate at which interest is calculated on the initial principal and the accumulated interest of previous periods.

Compounded Monthly

The calculation of interest on both the initial principal and the accumulated interest from previous months.