Suppose the major soft drink companies develop vending machines for canned and bottled drinks that can determine your maximum willingness-to-pay for a drink, and the machine charges you that price when you purchase a drink
If this were possible, the consumer surplus in the vended soft drink market would be: A) positive because consumer surplus equals consumer expenditures in this case.
B) positive because the market demand curve is perfectly inelastic in this case.
C) negative because people are not actually willing to pay their maximum value for the product.
D) zero because all surplus value is captured by the seller.
D
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The price system
A) is the voluntary exchange system used in the United States. B) is old fashioned and is no longer used. C) is used only in countries that are developing. D) is used to set resource prices only.
In the market for Canadian dollars measured in US dollars, the demand for Canadian dollars is
a. The supply of Canadian dollars b. The demand for US Dollars c. The supply of US dollars d. None of the above
In an oligopoly, each firm knows that its profits
a. depend only on how much output it produces. b. depend only on how much output its rival firms produce. c. depend on both how much output it produces and how much output its rival firms produce. d. will be zero in the long run because of free entry.
Bill is willing to cut lawns for a minimum of $200 a week. He is, however, paid $250 for the same service by a lawn maintenance company. This is an example of
a. consumer surplus. b. employment discrimination. c. producer surplus. d. the derivation of accounting profit.