Consumer surplus arises in a market because:
A. At the current market price, quantity supplied is greater than quantity demanded
B. At the current market price, quantity demanded is greater than quantity supplied
C. The market price is below what some consumers are willing to pay for the product
D. The market price is higher than what some consumers are willing to pay for the product
C. The market price is below what some consumers are willing to pay for the product
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The generosity of the U.S.'s foreign aid after World War II was:
A. over $12 billion to 16 countries in an effort to help them rebuild. B. not entirely altruistic and had strategic political motives as well. C. unprecedented. D. All of these statements are true.
Assume that Australia has a comparative advantage in producing surfboards and New Zealand imports surfboards from Australia. We can conclude that
A) Labor costs are higher for surfboard producers in New Zealand than in Australia. B) Australia also has an absolute advantage in producing surfboards relative to New Zealand. C) Australia has a lower opportunity cost of producing surfboards relative to New Zealand. D) New Zealand has an absolute disadvantage in producing surfboards relative to Australia.
Explain the exchange rate over-shooting hypothesis
What will be an ideal response?
The lemons problem is due to
A) asymmetric information. B) moral hazard. C) hidden actions. D) symmetric information.