What consumer surplus is received by someone whose willingness to pay is $35 below the market price of a good?
A. $35
B. $0
C. ($35 x P*)
D. None of these is correct.
B. $0
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A normal good is defined as a product for which quantity demanded increases as price decreases
a. True b. False
Economists of the rational expectations school: a. have no confidence in the ability of workers and firms to observe and react to economic events
b. believe workers and firms behave the same regardless of what the Fed does. c. have great faith in the ability of monetary policy makers to maintain a full employment economy with stable prices. d. believe that effective monetary policy can shift the potential level of output to the right. e. believe workers and firms make decisions based on what they think monetary policy will be in the future.
The idea of rational ignorance implies that people are fully informed about their market purchases but uninformed about political issues
a. True b. False Indicate whether the statement is true or false
The classicals, applying Say's law, believed that all our income would be _______, all our production would be _______ and all our savings would be ________.
Fill in the blank(s) with the appropriate word(s).