Consumer surplus from a given purchase is the difference between what one was willing to pay for that purchase and what was actually paid
Indicate whether the statement is true or false
True . This is the definition of consumer surplus.
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Which of the following is true about a risk-averse individual facing a full menu of actuarily fair insurance contracts to choose from?
A. The individual will "over-insure" if consumption is more meaningful in the good state. B. The individual will "over-insure" if consumption is more meaningful in the bad state. C. The individual will fully insure when tastes are state-independent. D. (a) and (b) are true. E. (a) and (c) are true. F. (b) and (c) are true. G. All of the above. H. None of the above.
"The price of compact fluorescent light bulbs fell because of improvements in production technology. As a result, the demand for incandescent light bulbs decreased
This caused the price of incandescent light bulbs to fall; as the price of incandescent light bulbs fell the demand for incandescent light bulbs decreased even further." Evaluate this statement. A) The statement is false because the demand for incandescent light bulbs would increase as the price of compact fluorescent light bulbs fell. B) The statement is false because it confuses the law of demand with the law of supply. C) The statement is false. A decrease in the price of compact fluorescent light bulbs would decrease the demand for incandescent light bulbs, but a decrease in the price of incandescent light bulbs would not cause the demand for incandescent light bulbs to decrease. D) The statement is false because compact fluorescent light bulbs producers would not reduce their prices as a result of improvements in technology; doing so would reduce their profits.
One reason for the fall in the natural rate of unemployment from 1980 to 2000 is
A) changes in the demographic composition of the work force. B) the decline in inflation. C) increased competition from foreign workers. D) the depreciation of the dollar relative to foreign currencies.
Dating the start of falling labor productivity growth in 1973 is very suggestive of this explanation for it: ________ energy prices and ________ use of energy per worker
A) higher, decreased B) higher, increased C) lower, decreased D) lower, increased