Assume a market that has an equilibrium price of $8. If the market price is set at $7, consumer surplus:
A. rises for some because of the decreased price.
B. decreases for some because of fewer transactions taking place.
C. Both of these statements are true.
D. Neither of these statements is true.
C. Both of these statements are true.
You might also like to view...
Using the figure above, suppose education is provided by public colleges. At what level should tuition be set to ensure the efficient number of students?
A) $10,000 B) $5,000 C) $20,000 D) $25,000 E) $15,000
The scope of the EITC program changed dramatically in
A. 1963. B. 1983. C. 1993. D. 1996.
If a person supplies fewer hours of labor in response to a wage increase, then
A) the substitution effect is greater than the income effect. B) the income effect is greater than the substitution effect. C) the income effect equals the substitution effect. D) the person is not maximizing utility.
Beginning in about 1990, lending to and investing in developing countries began to increase. One explanation for this is that
A. interest rates in the United States were low. B. the governments in the developing countries began to encourage import-substituting manufacturing. C. after the successful Brady Plan, bank lending again became much more than half of all financial flows to developing countries. D. more developing countries began to offer insurance against exchange-rate risk.