In a perfectly competitive market, if all firms face identical, constant marginal marginal cost curves, then consumer surplus is
A) the area beneath the market demand curve and above the market clearing price.
B) the area above the market demand curve and above the market clearing price.
C) the total area beneath the market demand curve.
D) definitely zero.
A
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As of 2009, most countries in the world live in autarky
Indicate whether the statement is true or false
As the LM curve becomes steeper, an unexpected decrease in consumer confidence
A) will cause a relatively large increase in output and relatively large increase in the interest rate. B) will cause a relatively small increase in output and relatively small increase in the interest rate. C) is more likely to cause stock prices to rise. D) is more likely to cause stock prices to fall.
Adam has 3 apples and 3 oranges. Eve has 2 apples and 2 oranges. The marginal utilities for Adam and Eve are summarized in the above table. Adam asks Eve to exchange one of her apples for an orange.
A. Eve will be willing to make the exchange, because her total satisfaction will remain unchanged. B. Eve will be unwilling to make the exchange, because she loses 15 utils of satisfaction. C. Eve will be unwilling to make the exchange, because she loses 5 utils of satisfaction. D. Eve will be willing to make the exchange, because her total satisfaction will increase.
The U.S. has many banks because:
A. the Great Depression caused the failure of the large banks, leaving many small banks. B. the Glass-Steagall Act forced the splitting up of large banks. C. small banks are more profitable than large banks. D. many states outlawed bank branching.