If an individual consumer is willing to pay $11 for one unit of a good but is able to purchase it for $7, then his or her consumer surplus from the purchase of that unit would be:
A. $4.
B. $7.
C. $11.
D. $18.
Answer: A
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If a one-year bond currently yields 5% and is expected to yield 7% next year, the liquidity premium theory predicts that the yield today on a two-year bond should be
A) 5%. B) less than 6%, but more than 5%. C) 6%. D) more than 6%.
Which of the following is an example of a public good?
A) a lighthouse B) a box of cookies C) any kind of public transportation D) the subway
The "universal service" argument often requires that some products be sold at a loss while other products be sold at profits higher than normal
a. True b. False Indicate whether the statement is true or false
A positive externality
a. causes the product to be overproduced. b. provides an additional benefit to market participants. c. benefits consumers because it results in a lower equilibrium price. d. is a benefit to a market bystander.