Consumer’s surplus is a measure of how much
A. less than his income a consumer spends on goods.
B. more utility a consumer receives from his purchases than he has to pay for them.
C. a consumer’s marginal utility differs from his total utility.
D. a change in price induces a consumer to substitute other goods.
Answer: B
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Moe divides his time between studying Physics and studying Economics. His production possibilities curve for his final grade in each class is shown in the accompanying figure.
Both of Moe's professors require at least a 65 to pass and a 90 to earn an A. Which of the following is true?
A. Moe can pass economics, but only if he fails physics. B. Moe can pass both classes. C. Moe can pass physics, but only if he fails economics. D. Moe could earn an A in economics and still pass physics.
For this question, assume that expected inflation is equal to the nominal interest rate. In this situation, which of the following is correct?
A) The real interest rate is negative. B) The real interest rate is positive. C) The real interest rate is higher than the nominal interest rate. D) The real interest rate is zero.
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The marginal rate of transformation in moving from Point B to Point A is
A. -2/3. B. -3/4. C. -1.5. D. -20.
When generic drugs enter the market after the patent for a brand name drug expires, the price of the brand name drug often increases. This is usually due to
A) the demand curve for the brand name drug shifting in but becoming more inelastic. B) the demand curve for the brand name drug not shifting, but the marginal cost of producing the good increases. C) the demand curve for the brand name drug shifting in but becoming more elastic. D) the demand curve for the brand name drug not shifting, but loyal customers are willing to pay a higher price for the brand name drug.