The difference between the maximum amount that a consumer is willing to pay for a product and the price that is paid for the product describes:
A. consumer surplus.
B. the cost of producing a unit of the product.
C. marginal utility.
D. producer surplus.
Answer: A
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This Application refers to quantitative easing, a policy that occurs when the Fed
A) changes the reserve requirement. B) purchases long-term securities. C) raises the discount rate. D) sells mortgage-backed securities.
Personal consumption expenditures are the largest component of GDP
a. True b. False Indicate whether the statement is true or false
If a profit-maximizing, perfectly competitive firm is making only a normal profit in the short run, then the firm is in:
a. disequilibrium. b. equilibrium where MR exceeds minimum ATC. c. equilibrium where MR equals minimum AVC. d. equilibrium where P = AFC. e. equilibrium where P = ATC
Suppose a monopolist can charge different prices to different customers, such as doctors charging different prices depending on whether the patient is insured. How will profits and marginal revenue of such a price-discriminating monopolist compare to profits and MR of an ordinary monopolist who must charge all patients the same fee?