When consumer surplus is negative, a consumer is willing to pay more than the market price of the good
a. True
b. False
Indicate whether the statement is true or false
False
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A business produces 5,000 units per month. It spends $12,000 on raw materials. It pays wages of $20,000 . Other costs include $50,000 for rent, paid by the month. In order to break even the selling price per unit will have to be:
a. $25.20 b. $16.4 c. $20.30 d. $28
Sven has a comparative advantage over Alice in cooking but not in doing the laundry. Which of the following must be true?
a. Sven must have an absolute advantage in both cooking and doing the laundry. b. Sven has a lower opportunity cost in doing the laundry. c. Sven has an absolute advantage in doing the laundry. d. Alice must have an absolute advantage in cooking. e. Sven must have a lower opportunity cost than Alice for cooking.
Which of the following examples has the highest opportunity cost?
a. When interest rates are at 10 percent, Krisjan places all of his wages into a checking account. b. Katrin considers placing money in a Treasury Bill with interest of 7 percent, but decides against it. c. Gunnar decides not to invest in a CD that has an interest rate of 5 percent. d. When interest rates are at 3 percent, Freyja decides to use her money for everyday expenses.
If people hold onto some money as cash, rather than depositing it into banks:
A. this will not affect the size of the money multiplier. B. the money multiplier will be smaller. C. the money multiplier will be zero. D. the money multiplier will be larger.