Andy purchases coffee from the local coffee shop. When the price of a cup increases by $0.50, Andy's
a. comsumer surplus decreases.
b. producer surplus decreases.
c. consumer surplus increases.
d. producer surplus increases.
Ans: a. comsumer surplus decreases.
You might also like to view...
The short-run Phillips curve presents a tradeoff because a
A) lower unemployment rate can be achieved at the cost of a higher inflation rate. B) higher inflation leads to a higher nominal interest rate. C) lower unemployment rate can be achieved at the cost of a lower inflation rate. D) higher price level leads to a lower real GDP. E) higher unemployment rate can be achieved at the cost of a higher inflation rate.
Catherine compares the prices of candy bars in order to get the "best buy." This comparison represents using money as a
A) medium of exchange. B) store of value. C) unit of account. D) none of the above.
The cross-price elasticity of demand between pancakes and waffles is positive. This indicates all of the following except one. Which is the exception?
a. Pancakes and waffles are substitutes. b. An increase in the price of pancakes will shift the demand curve for waffles to the right. c. An increase in the price of waffles will shift the demand curve for pancakes to the right. d. A decrease in the supply of waffles will shift the demand curve for pancakes to the right. e. Pancake demand and waffle demand are price elastic.
It is true that a stable economy occurs when
a. total injections into the circular flow are large enough to make up for government tax leakages. b. total leakages from the circular flow are great enough to offset the effects of government spending. c. total planned leakages from the circular flow are exactly equal to total planned injections into the circular flow. d. actual saving is equal to planned investment.