Suppose Bill receives a consumer surplus of $3 on his purchase of a pizza, for which he paid $9. The price Bill was willing and able to pay is
a. $15
b. $12
c. $9
d. $6
Answer: b. $12
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Which of the following accurately measures the welfare or happiness of society?
A) Nominal GDP B) Real GDP C) Both Nominal GDP and Real GDP D) None of the above.
A minimum wage policy induces an:
A) excess demand for labor. B) excess supply of labor. C) efficient market outcome. D) elastic labor supply response.
Which of the following statements is correct?
A) Demand pull inflation is caused by an increase in demand and an increase in supply. B) Cost push inflation is the result of rising input costs pushing the aggregate demand curve to the left. C) Demand pull inflation is caused by an increase in demand and an increase in the quantity supplied. D) None of the above.
Billy is deciding whether to watch TV at home or go spend time with his friends. If Billy decides to stay home, we can conclude that:
A. Billy is a homebody and never goes out. B. Billy will get more utility from watching TV than spending time with his friends. C. Billy will regret not spending more time with his friends. D. Billy's revealed preference is to always be alone.