In economics, the concept of surplus:
A. measures the benefit that people receive when they sell something for more than they would have been willing to accept.
B. is the best way to look at the benefits people receive from successful transactions.
C. measures the benefit that people receive when they buy something for less than they would have been willing to pay.
D. All of these are true.
Answer: D
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Figure 4.3 illustrates the demand for tacos. Assume that tacos and burritos are substitutes. A decrease in the price of burritos would bring about a movement from
A) point a to point c. B) point c to point b. C) D2 to D0. D) D1 to D2.
If Healthy Bars sells its snack bars in the United States for $3 a bar and for $2 (dollar equivalent) in Mexico, this is an example of ________.
A) two-part pricing B) third-degree price discrimination C) peak-load pricing D) second-degree price discrimination
If there is a technological inprovement, PPF curve will shift inward.
Indicate whether the statement is true or false.
If a bank's desired reserve-deposit ratio is 0.33 and it has deposit liabilities of $100 million and reserves of $50 million, it:
A. has the correct amount of reserves and outstanding loans. B. has too few reserves and will reduce its lending. C. has too many reserves and will increase its lending. D. should increase the amount of its reserves.