Juanita goes to the Hardware Emporium to buy a new circular saw. She is willing to pay $120 for a new saw, but buys one on sale for $85. Juanita's consumer surplus from the purchase is
A) $35.
B) $85.
C) $120.
D) $205.
Answer: A
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The IS curve has a positive slope because a(n) __________ in the interest rate leads to a(n) __________ in desired investment and this leads to a decrease in GDP
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
When a negative externality exists in the case of a particular good, and if that is not reflected in the price, _____
a. too little of that good is produced and consumed b. too much of that good is produced and consumed c. all resources are taken away from the production of that good d. the government completely prohibits the consumption of that good e. all resources are allocated to the production of that good
When the price of candy bars increased from $0.45 to $0.55, the quantity demanded changed from 21,000 per day to 19,000 per day. In this price range, the price elasticity of demand coefficient (based on the midpoint formula) for candy bars is
A. -1. B. -0.5. C. -2. D. -0.18.
Suppose the U.S. inflation rate falls while the inflation rate among the members of the European Monetary Union (EMU) holds constant. Other things equal, what will happen in the balance of payments accounts?
What will be an ideal response?