Suppose Ferd truthfully tells the car dealer the maximum amount he's willing to pay for a Ford Mustang: $20,000 . The dealer says, "You're in luck; we have one on the lot for $20,000." Which of the following statements is true?
a. Ferd will not buy the car.
b. The car is not worth $20,000.
c. Ferd gets $20,000 in consumer surplus.
d. Ferd gets no consumer surplus.
e. The dealer earns $20,000 in consumer surplus.
D
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A decrease in disposable income will shift the aggregate demand curve to the left
Indicate whether the statement is true or false
The social cost of production, in cases where negative externalities exist, is equal to the
a. sum of private and external costs minus social benefit b. sum of private and external costs c. sum of private cost and external cost minus social benefit d. sum of private cost and external cost e. current market price plus the external cost
Economic thinking indicates that efficient adaptation strategies to reduce harms from future global warming will
a. focus on reducing overall carbon emissions. b. emphasize changes like those imposed on prosperous nations by the Kyoto Treaty. c. focus on reducing the effects of serious problems that we know to exist. d. ensure that every precaution will be taken to reduce any possible risks for the future.
According to the endowment effect, people are unwilling to sell a good they already own in which of the following situations?
a. if they are offered a price greater than the price they would pay if they did not already own the good b. if they are offered a price lower than the price they would have to pay to replace the good c. if they can't replace the good d. if the good was a gift that had great sentimental value