"Unlike a monopoly, consumer surplus in a perfectly competitive market is zero." Do you agree or disagree? Why?
What will be an ideal response?
Disagree. As long as the market demand curve is downward sloping, consumer surplus, which is represented by the area between the demand curve and the market supply curve, is not zero. There is no deadweight loss, however.
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Refer to Figure 4.7. You will receive a payoff of 0 points if you ask for points and so do ________ of your classmates
A) 0 B) 6 C) 12 D) none of the above
Comment on the following statement: "Capital investment decisions always involve risk."
What will be an ideal response?
An unexpected fall in the Purchasing Managers' Index should send bond prices __________ and stock prices __________
A) up; up B) up; down C) down; up D) down; down
A normal production possibilities frontier has a
a. positive slope, and is steeper near the horizontal axis than near the vertical axis. b. negative slope, and is steeper near the horizontal axis than near the vertical axis. c. positive slope, and is steeper near the vertical axis than near the horizontal axis. d. negative slope, and is steeper near the vertical axis than near the horizontal axis. e. zero slope, and it does not touch the horizontal axis.