Which of the following best describes consumer surplus?
a) The price consumers are willing to pay for a
unit.
b) The cost of providing a unit.
c) The profits made by a firm.
d) The difference between the price a consumer pays for an item and the price he/she is willing to pay.
Answer: d) The difference between the pric a consumer pays for an item and the price he/she is willing to pay.
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As Sally increases her consumption of a good, she experiences diminishing marginal utility if her total utility
A) increases at a constant rate. B) increases at a decreasing rate. C) increases at an increasing rate. D) decreases.
Why does the gravity model work?
A) Large economies became large because they were engaged in international trade. B) Large economies have relatively large incomes, and hence spend more on government promotion of trade and investment. C) Large economies have relatively larger areas which raises the probability that a productive activity will take place within the borders of that country. D) Large economies tend to have large incomes and tend to spend more on imports. E) Large economies tend to avoid trading with small economies.
According to the open-economy macroeconomic model, a decrease in the U.S. government budget deficit increases U.S. net capital outflow, causes the real exchange rate of the dollar to depreciate, and increases U.S. net exports
a. True b. False Indicate whether the statement is true or false
The study of the decision-making process of government is the study of:
a. public choice theory. b. rational expectations theory. c. Keynesian economics. d. social economics.