As price falls along a particular demand curve, consumer surplus:
A. decreases rapidly.
B. decreases by a very small amount.
C. remains constant.
D. increases.
Answer: D
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Countries that experience very high rates of inflation may also have
A) balanced budgets. B) rapidly growing money supplies. C) falling money supplies. D) constant money supplies.
Governments may successfully intervene in competitive markets in order to achieve economic efficiency
A) at no time; competitive markets are always efficient without government intervention. B) to increase the incidence of positive externalities. C) in cases of positive externalities only. D) in cases of negative externalities only. E) in cases of both positive and negative externalities.
The price elasticity of demand for labor will be greater, the
A) greater is the price elasticity of demand for the final product. B) more difficult it is to employ substitute inputs in production. C) smaller is the proportion of wage costs in the total cost of production. D) shorter is the time period under examination.
The phase in the business cycle in which real GDP declines is called a:
a. trendline. b. peak. c. recession. d. recovery. e. trough.