When policymakers are considering a particular action, they can use consumer surplus as a(n)
a. objective measure of the benefits to buyers as determined by policymakers.
b. measure of the benefits to buyers as the buyers perceive them.
c. potentially flawed measure of the benefits to buyers if the buyers are not rational.
d. Both b) and c) are correct.
d
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Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for ramen noodles, an inferior good. Which panel describes what happens in this market as a result of an increase in income?
A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
When the expenditure schedule is too low, the result is a(n)
a. unemployment surplus. b. inflationary gap. c. recessionary gap. d. budgetary gap.
An expenditure-changing policy
A) alters the direction of the economy's total demand for goods and services. B) alters the level of the economy's total demand for goods and services. C) has no effect on aggregate demand. D) is the same thing as an expenditure-switching policy. E) affects aggregate supply but not aggregate demand.
In peak-load pricing,
A) marginal revenue is equal in both periods. B) marginal revenue in the peak period is greater than in the off-peak period. C) marginal revenue in the peak period is less than in the off-peak period. D) the sum of the marginal revenues is greater than the sum of the marginal costs.