At prices above a consumer’s reservation price:
A. the opportunity cost is less than the benefit from having the good.
B. the opportunity cost is greater than the benefit from having the good.
C. the buyer will purchase the good.
D. the willingness to pay is greater than the price.
B. the opportunity cost is greater than the benefit from having the good.
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When inventories accumulate, unemployment rises.
Answer the following statement true (T) or false (F)
Looking at the relationship between elasticity and total revenue, we can see that ____
a. b and c b. when demand is unit elastic, small price changes don't change total revenue c. when a good is price inelastic, revenue increases when prices increase d. when a good is price elastic, revenue increases when prices increase e. total revenue is maximized when the elasticity has stopped changing
Economic analysis suggests that countercyclical macro-policy will
a. be difficult to time properly because of uncertainty about the future direction of the economy. b. be difficult to implement because we do not know whether monetary policy is transmitted through the interest rate, or whether it affects aggregate demand directly. c. reduce the natural rate of unemployment when macro-policy is persistently expansionary. d. help reduce economic instability if, and only if, we are willing to tolerate double-digit inflation.
The rate at which a consumer will exchange one good for another is called:
A. marginal utility. B. the marginal rate of transformation. C. the rate of substitutability. D. the marginal rate of substitution.