A demand curve is the graphical representation of the law of demand
Indicate whether the statement is true or false
True
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Consumer’s surplus
A. is the gap between total willingness to pay and the total market value of a good. B. guarantees that the market value of a good in money is equal to the total economic value of the good. C. is always negative because of diminishing marginal utility. D. is the total area under a consumer’s demand curve.
Which of the following does NOT contain an externality?
A) I sell you an ice cream and you drip it all over the person sitting next to you. B) I sell you an ice cream and it gives you a headache. C) I sell you an ice cream and you share it with your friend. D) I give you an ice cream and you share it with a friend.
A competitive equilibrium
A) is always economically efficient. B) is efficient only if there is an externality. C) is economically efficient only given some special conditions. D) does not exist without government taxation.
For a given rate of interest, the total interest you receive from lending money
A) increases with the frequency of compounding. B) decreases with the frequency of compounding. C) is independent of the frequency of compounding. D) is greatest when there is no compounding.