Along a straight-line downward-sloping demand curve, a decrease in the market price of a good:
A) will cause no change in consumer surplus.
B) will increase consumer surplus.
C) will decrease consumer surplus.
D) may either decrease or increase consumer surplus.
Ans: B) will increase consumer surplus.
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The Fed would be pursuing a contractionary monetary policy if it was
A) selling bonds in the open market. B) lowering the differential between the discount rate and the federal funds rate. C) selling dollars in foreign exchange markets. D) lowering the reserve requirement.
The cross-price elasticity of demand is useful for determining which pairs of commodities serve as substitutes for each other
a. True b. False
If all firms in an industry are price-takers, then:
What will be an ideal response?
Refer to the table below. As stated in the first row, the income of the consumer (1) equals $20. The price of good X (Px) equals $4.00, and the price of good Y (Py) equals $2.00. Total utility derived from consuming X and Y is listed. What combination of goods X and Y will maximize utility subject to the consumer's budget constraint?
