Charlie is willing to pay $10 for a T-shirt that is priced at $9. If Charlie buys the T-shirt, then his consumer surplus is
A. $0.90.
B. $19.
C. $90.
D. $1.
Answer: D
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Which statement best characterizes the second-best policy offered by a monopoly insurer when it can't observe the consumer's risk?
a. It is a single contract offering partial insurance at an intermediate price such that all types are served. b. It is a menu of contracts providing full insurance for the least risky types and partial insurance for higher risks. c. It is a menu of contracts providing full insurance for the riskiest type and partial insurance at lower prices for lower risks. d. The market breaks down since the monopolist cannot design contracts without observing each consumer's risk.
As the price level increases, the quantity of RGDP demanded in the economy ____, and when the price level decreases, the quantity of RGDP demanded in the economy ____
a. decreases, decreases b. increases, increases c. increases, decreases d. decreases, increases
The identity that shows that total income and total expenditure are equal is
a. GDP = Y. b. Y = DI + T + NX. c. GDP = GNP - NX. d. Y = C + I + G + NX.
Explain how a price floor set above the equilibrium market price for a good can cause a surplus of that good
What will be an ideal response?