The consumers' surplus derived from the last unit of a good purchased
a. tends to be less than 0
b. tends to be equal to 0
c. tends to equal the price of the good
d. tends to be greater than the price of the good
e. depends on the marginal utility of the first unit purchased
B
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A characteristic function is:
a. one that identifies negotiations which depend on the characteristics of the bargainers. b. one that gives the value each possible coalition of a group's members can create by operating independently. c. one that identifies the most beneficial price for the buyer involved in a transaction. d. one that identifies the most beneficial price for the seller involved in a transaction.
If a basket of goods costs $100 in 2015 and the price index rises by 4 percent every year, the same basket would cost _____ in 2020
a. $104 b. $100 c. $121.7 d. $200
Which of the following is an efficiency argument against the welfare state?
a. High marginal tax rates create large disincentives to work and lower overall production. b. It is fairer to tax those with higher incomes than those with lower incomes. c. The government has no right to force those with higher incomes to pay more taxes than those with lower incomes. d. Principles of social justice argue that society should take care of the poor.
If a borrower and a lender agree on a long-term loan at a nominal interest rate that is fixed over the duration of the loan, how will a higher-than-expected rate of inflation impact the parties if at all?
What will be an ideal response?