As the price of a good increases, the loss in consumer surplus is larger,
A) the more elastic demand is.
B) the more money previously spent on the good.
C) the less money previously spent on the good.
D) the smaller the price increase.
B
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The number of buyers of sport utility vehicles, SUV, decreases sharply. So the
A) demand curve for SUVs shifts leftward. B) demand curve for SUVs shifts rightward. C) demand curve for SUVs does not shift, nor is there a movement along then demand curve. D) demand curve for SUVs does not shift, but there is a movement downward along it. E) supply curve for SUVs shifts rightward.
If the government has a budget deficit, crowding out might occur. Crowding out leads to all of the following EXCEPT
A) a higher real interest rate. B) a decreased quantity of investment. C) a smaller capital stock in the future. D) decreased private saving.
A firm that decides to make a price cut assumes that marginal profit is negative.
Answer the following statement true (T) or false (F)
Another term for "don't put all your eggs in one basket" is
A) moral hazard. B) indirect finance. C) asymmetric information. D) portfolio diversification.