Consumer surplus:
A. is the difference between the maximum prices consumers are willing to pay for a product
and the lower equilibrium price.
B. the difference between the maximum prices consumers are willing to pay for a product and
the minimum prices producers are willing to accept.
C. the difference between the minimum prices producers are willing to accept for a product
and the higher equilibrium price.
D. rises as equilibrium price rises.
Answer: A
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Globalization and growing technology have produced
A) more opportunities for low-skilled labor than for high-skilled labor. B) equal opportunities for low-skilled and high-skilled labor. C) outsized, exponential rewards for superstar talent. D) rewards for labor that have reduced income inequality.
If you put $2,000 in a saving account that earns 3% interest per year, what is the formula you should use to determine the account's future value in one year?
A) Future value = $2,000 × 0.03. B) Future value = $2,000 / 0.03. C) Future value = $2,000 / (1 + 0.03). D) Future value = $2,000 × (1 + 0.03).
In the Keynesian model, an increase in real autonomous spending results in a greater increase in real Gross Domestic Product (GDP) if
A) the marginal propensity to consume (MPC) is lower. B) the marginal propensity to consume (MPC) is higher. C) the average propensity to save (APS) is higher. D) the average propensity to save (APS) is lower.
When the marginal revenue product of an input is less than its price, the
a. producer should expand the use of that input. b. price of the input will automatically rise in a free market. c. producer should reduce the use of that input. d. marginal physical product of that input must be below its average physical product.