Deadweight loss
A. is measured as the combined loss of consumer surplus and producer surplus.
B. results from producing a unit of output for which the maximum willingness to pay exceeds the minimum acceptable price.
C. can result from underproduction, but not from overproduction.
D. can result from overproduction, but not from underproduction.
Answer: A. is measured as the combined loss of consumer surplus and producer surplus
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Suppose that the owner of a local ice cream store, knowing that demand for ice cream is higher when the weather is warmer, always charges a price in cents for a scoop of ice cream that is equal to two times the current outdoor temperature, measured in Fahrenheit (so that if it is 90 degrees outside, the ice cream is $1.80 per scoop). This type of behavior is ________.
A. exactly the type of behavior that Keynes believed most firms exhibit. B. free from menu costs. C. inconsistent with the key assumption upon which the basic Keynesian model is built. D. known as meeting demand.
If country A is importing good x from country B where x is produced along a perfectly inelastic supply curve, then country B will suffer the entire deadweight loss from any tariff imposed on imports to country A.
Answer the following statement true (T) or false (F)
If a person is going to pay $500 per month every month for 5 years, what do you know about their car loan (if the interest rate is positive)?
A. The loan amount was exactly $30,000. B. The loan amount was less than $30,000. C. The loan amount was more than $30,000. D. Nothing.
Money held for contingencies reflects the _______ demand for money.
A) speculative B) exchange C) transactions D) precautionary