Suppose a consumer has determined that her reservation price, R, is $75. The expected benefit of an additional search at this reservation price is $25. Based on this information we can conclude that:
A. this consumer will accept any price below $75.
B. search costs are $25 per search.
C. search costs are $25 per search, and this consumer will accept any price below $75.
D. this consumer will reject any price above $25.
Answer: C
You might also like to view...
Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
Growth in GDP systematically understates the growth in national well-being because
A. ecological costs are netted out of GDP. B. “bads” as well as “goods” get included in GDP. C. investment is not included in GDP. D. as a country gets richer, leisure time increases.
Refer to the following graphs.
Which of the graphs correctly labels the axes of the AS-AD model?
A. Graph (1) B. Graph (2) C. Graph (3) D. Graph (4)
From the standpoint of economic growth, banks are important to
What will be an ideal response?