All else equal, what happens to consumer surplus if the price of a good decreases?
a. Consumer surplus increases.
b. Consumer surplus decreases.
c. Consumer surplus is unchanged.
d. Consumer surplus may increase, decrease, or remain unchanged.
a
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
Hummel is a line of figurines based on the artistic style of German nun Maria Innocentia Hummel and have become a collector's item. The Hummel figurines are almost uniformly "cute
" Lukas, Felix, Anya, and Hannah sell Hummel figurines through the internet. Their willingness to sell price for one figurine is: Lukas $240, Felix $180, Anya $150, Hannah $130. Suppose the price of a Hummel figurine is $150, who will sell their figurine? A) Anya and Hannah B) Lukas, Felix, and Anya C) Felix, Anya, and Hannah D) Hannah
In a perfectly competitive market in which identical firms face the same horizontal marginal cost curve, if demand increases, then the amount of consumer surplus will
A) increase. B) decrease. C) become negative. D) not change.
If a small percentage change in price causes a larger percentage change in the quantity demanded, the good has:
A. an inelastic demand. B. a low magnitude of response. C. an elastic demand. D. a high magnitude of response.