When a service, such as medical care, is provided free of charge,
a. most people consume an infinite amount of it
b. most people do not much care about getting good value for their money
c. people do not derive any consumer surplus from it
d. we say that the demand for it is perfectly elastic
e. we say that the demand for it is perfectly inelastic
B
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The Telecommunications Act of 1996 brought financial well-being to telecommunications firms
Indicate whether the statement is true or false
Aaron gave up a job in a tire shop that paid $20,000 a year to start his own T-shirt business. The T-shirt company has the following revenues and costs: TR = $60,000 . cost of hiring employees = $40,000 . cost of materials = $8,000 . cost of rent and insurance = $6,000 . According to these data, Aaron's business made a(n)
a. economic profit of $6,000 b. normal profit of $6,000 c. economic loss of $6,000 d. economic loss of $14,000 e. normal profit of $14,000
Which of the following statements is correct?
a. The demand for natural gas is more elastic over a short period of time than over a long period of time. b. The demand for smoke alarms is more elastic than the demand for Persian rugs. c. The demand for bourbon whiskey is more elastic than the demand for alcoholic beverages in general. d. All of the above are correct.
When consumers pay only a fraction of the true cost of medical services, their demand increases. The marginal cost of producing these extra services
A) is greater than the marginal benefit consumers receive from them. B) is less than the marginal benefit consumers receive from them. C) is equal to the marginal benefit consumers receive from them. D) is zero due to the insurance payments.