The figure above shows Cindy's demand for CDs per year. a) What is Cindy's total consumer surplus if the price of a CD is $12? b) What is Cindy's total consumer surplus if the price of a CD is $9? c) What happens to Cindy's consumer surplus when
the price of a CD falls?
a) Her consumer surplus when the price of a CD is $12 equals $15, the area of the triangle under the demand curve and above the price.
b) Her consumer surplus when the price of a CD is $9 equals $60, the area of the triangle under the demand curve and above the price.
c) As the price of a CD falls, Cindy's consumer surplus increases. This result reflects the observation that consumers are better off when prices are lower.
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The absolute price of a commodity is the amount of
a. other goods that must be sacrificed in order to purchase one unit of the commodity. b. resources required to produce one unit of the commodity. c. currency needed to purchase one unit of the commodity. d. time and effort used to develop a market for the buying and selling of the commodity.
If the Fed increases the discount rate, what happens to the money supply?
A. Increases B. Decreases C. Stays the same D. None of these
Which of the following statements is FALSE?
A. An unregulated, profit-maximizing monopolist will not operate in the inelastic portion of the demand curve. B. The marginal revenue earned by a monopolist will always be less than the product's price. C. For a profit-maximizing monopolist, marginal revenue equals marginal cost. D. Typically there are numerous very close substitutes for the product of a monopolist.
If the value of net exports is negative, then
A. imports exceed exports. B. exports equal imports. C. exports exceed imports. D. imports are zero.