If James is willing to sell an extra concert ticket for $40 and actually sells it for $100, his consumer surplus is $60
a. True
b. False
Indicate whether the statement is true or false
False
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Twenty years ago a stove cost $300 and a refrigerator cost $1,500. Today a stove costs $600, while a refrigerator costs $1,800. Which of the following statements is TRUE?
A) The relative price of stoves and refrigerators has not changed. B) The relative price of a refrigerator has increased. C) The relative price of a stove has increased. D) The money price of a refrigerator has fallen.
Information costs
A) are the costs of buying and selling financial claims. B) include the costs that savers incur to determine the credit worthiness of borrowers. C) include the costs borrowers incur to discover the best investments to make with the money they have borrowed. D) are zero in financial markets, but high for transactions carried out through financial intermediaries.
In the above figure, what happens to the firm's optimal level of output if the price it receives for its product decreases from P4 to P3?
A) Output stays the same. B) Output decreases. C) Output increases. D) There is not enough information provided to know what happens to output.
Which of the following is not a reason that the CPI overstates the cost of living?
A. The location of typical purchases is not adequately updated. B. There are too infrequent updates of the market basket. C. Substitution into nearly-equivalent goods is assumed to be more common than it is. D. Quality improvements are not adequately incorporated.