Given the Typical Shapes of the Marginal Cost and Marginal

question 102

Multiple Choice

Given the typical shapes of the marginal cost and marginal benefit curves for collecting information,

• A)it always pays to get more information.
• B)consumers tend to become experts about most goods.
• C)consumers remain completely ignorant about most goods.
• D)the equilibrium is somewhere between complete ignorance and becoming an expert.

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Definitions:

Straight-Line Method

A method of calculating depreciation by evenly distributing the cost of an asset over its useful life.

Semiannual Interest

An interest payment made twice per year on investment vehicles such as bonds, which represents a portion of the annual interest rate.

Annual Yield

The return on an investment over a one-year period, expressed as a percentage of the investment’s initial cost.

Market Rate

The current price or interest rate at which goods, services, or financial instruments are traded in a competitive marketplace.