When will consumers' surplus overstate the actual gains received by consumers?
a. When allocation decisions are not made on the basis of price.
b. When the commodity is not equally divided among consumers.
c. When all consumers place the same marginal value on the good.
d. When the distribution of goods is Pareto optimal.
a. When allocation decisions are not made on the basis of price.
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If the production possibilities frontier is linear, then
A) opportunity costs are increasing as more of one good is produced. B) opportunity costs are decreasing as more of one good is produced. C) opportunity costs are constant as more of one good is produced. D) it is easy to efficiently produce output.
An increase in the domestic real interest rate will tend to cause, other things the same ________
A) a depreciation of the domestic currency B) an increase in the demand for domestic goods and services C) an increase in demand for foreign currencies D) an appreciation of the domestic currency
Which of the following is the most liquid category of assets?
a. Large time deposits b. Money market mutual fund balances c. Small time deposits d. Saving-type accounts e. Demand deposits
An increase in price increases consumer surplus
a. True b. False Indicate whether the statement is true or false