Which of the following statements best describes the concept of consumer surplus?
A) "I paid $89 for a microwave oven last week. This week the same store is selling the same microwave oven for $69."
B) "I sold my hard copy of Harry Potter and the Half-Blood Prince to a used book store for $10 even though I was willing to sell it for $5."
C) "Target was having a sale on tube socks so I bought 5 pairs."
D) "I was going to pay $200 for new sunglasses that I had seen at the Oakley store but I ended up paying only $140 for the same sunglasses."
Answer: D
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Refer to Figure 13.1. If the voting method used to select a location for the recreation center is the plurality-rule method, the recreation center will be built in
A) Desert Sands. B) Glacier Cove. C) Mountain View. D) Oceanside.
In the short-run, higher prices can be caused by:
a. A decrease in aggregate supply, an increase in aggregate demand, or both. b. A decrease in aggregate supply, decrease in aggregate demand, or both. c. An increase in aggregate supply, increase in aggregate demand, or both. d. An increase in aggregate supply, a decrease in aggregate demand, or both. e. Central bank actions only.
Other things being equal, what is the effect of government deficit increases on interest rates?
A. Interest rates decline. B. Interest rates rise. C. There is no impact unless the Federal Reserve decides to alter the money supply. D. Interest rates hold constant because the demand for credit decreases.
The argument that econometric policy evaluation is likely to be misleading if policymakers assume stable economic relationships is known as
A) the monetarist revolution. B) the Lucas critique. C) public choice theory. D) new Keynesian theory.