Suppose there is an increase in supply that reduces market price. Consumer surplus increases because (1) consumer surplus received by existing buyers increases and (2) new buyers enter the market
a. True
b. False
Indicate whether the statement is true or false
True
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________ consumption is consumption that depends upon the level of GDP and ________ consumption is consumption that does not depend upon the level of GDP
A) Voluntary; autonomous B) Autonomous; voluntary C) Induced; autonomous D) Autonomous; induced
Peak load pricing which causes consumers to pay higher prices at certain times leads to greater efficiency
a. True b. False Indicate whether the statement is true or false
A study has estimated the effect of changes in interest rates and consumer confidence on the demand for money to be: ln M = 14.666 + .021 ln C ? 0.036 ln r, where M denotes real money balances, C is an index of consumer confidence, and r is the interest rate paid on bank deposits. Based on this study, a 5 percent increase in interest rates will cause the demand for money to:
A. increase by 1.8 percent. B. increase by 0.18 percent. C. drop by 0.18 percent. D. drop by 1.8 percent.
Which of the following is NOT a characteristic of a monopoly?
A. There is only one seller. B. A monopolist is a price-taker. C. There exist barriers to entry. D. A monopolist's sales revenue is constrained by the market demand.