The difference between the value of a good to sellers and its price is known as:
a. consumer surplus.
b. producer surplus.
c. demand
d. supply.
b
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Firms choose to price discriminate
a. To earn higher profits b. To sell goods to consumers who otherwise would not have purchased c. Both a and b d. None of the above
Adam Smith's basic economic philosophy stated in The Wealth of Nations can be stated as:
a. laissez faire. b. allow to act. c. the least government is best. d. all of these.
When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Economists believe that people who force themselves to always eat everything on their plate at a restaurant, regardless of how full they might feel, likely do so because:
A. they include the sunk cost of their meals in making their decision. B. they gain negative utility from insulting the chef. C. they overvalue the opportunity costs of their health and time involved with eating food they don't really want. D. they undervalue the true benefit of eating too much.