If Justin is willing to pay as much as $100 for a ticket to see the Rolling Stones, but is able to buy a ticket for $55, then he has a(n)
a. consumer surplus of $45
b. consumer deficit of $45
c. marginal utility of $45
d. marginal utility of $55
e. total utility of $155
A
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Jeremiah runs a bullfrog farm in Frogville, Oklahoma. Jeremiah notices that each additional worker he employs adds more to the total output than does the previous worker. Jeremiah must be
A) experiencing increasing marginal returns to labor. B) producing at a point where the average product of labor decreases as more workers are employed. C) producing at a point below his total product curve. D) mistaken because the law of decreasing returns points out that it cannot be the case that the marginal product increases as more workers are employed. E) producing at a point where the average product of labor exceeds the marginal product of labor.
A situation in which a benefit or a cost associated with an economic activity spills over to third parties is called
A) a public good. B) a merit good. C) an externality. D) the free-rider problem.
As a table manufacturing company produces more tables, the average total cost of each table produced increases. This could be because:
a. Total fixed costs are decreasing as more tables are produced b. There are economies of scale c. There are diseconomies of scale d. Total variable cost is decreasing as more tables are produced.
If the income tax system were indexed, a person whose nominal income went up from $30,000 to $33,000 in a year when the price index rose by 10 percent would pay
A. no increases in nominal income taxes. B. no increases in real income taxes. C. lower taxes in both real and nominal terms. D. higher taxes in both real and nominal terms.