If a price ceiling of $8 were placed in the market in the graph shown, which area represents deadweight loss?
A. B + D + F + G
B. E
C. F + G
D. B + D
Answer: D
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A rational choice is one that
A) must be made with perfect information. B) is made in the social interest rather than the self-interest. C) creates no costs for the decision maker. D) always turns out for the best for the decision maker. E) uses the available resources to most effectively satisfy the wants of the person making the choice.
The reservation wage is the
A) highest wage for which a person is willing to supply labor. B) lowest wage for which a person is willing to supply labor. C) wage for which a person is willing to work full time. D) wage for which a person is willing to work overtime.
The difference between a savings deposit and a time deposit is
A) time deposits pay no interest. B) savings deposits pay no interest. C) time deposits have specified maturities. D) savings deposits have specified maturities.
The law of diminishing marginal utility states that as more and more units of a good or service are consumed, total utility becomes smaller and smaller
Indicate whether the statement is true or false