Answer the following statements true (T) or false (F)
1. If the consumer is willing to pay a price higher than the actual price of a product, then the consumer will not buy the product because the consumer surplus will be negative.
2. Consumer surplus is the reason why sometimes a shopper regrets having bought a particular item.
3. Assume that there are four consumers A, B, C, and D, and the prices that each of them is willing to pay for a glass of lemonade is, respectively, $1.50, $1.20, $1.00, and $0.90. If the actual price of lemonade is $1.00 per glass, then consumer surplus in this market will be $0.70.
4. When the marginal benefits exceed the marginal costs of producing a product, then allocative efficiency is not achieved in the market.
1. FALSE
2. FALSE
3. TRUE
4. TRUE
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On the foreign exchange market, an increase in a country's exchange rate
A) decreases the demand for its currency and shifts the demand curve rightward. B) increases the quantity demanded of its currency and leads to a movement up along the demand curve. C) decreases the quantity demanded of its currency and leads to a movement up along the demand curve. D) decreases the demand for its currency and shifts the demand curve leftward. E) increases the quantity demanded of its currency and leads to a movement down along the demand curve.
When a corporation uses profits to pay for the purchase of new capital equipment, this is known as
A) reinvestment. B) a coupon payment. C) dividend. D) collusion.
A small increase in productivity growth can have a huge impact on a country’s standard of living.
Answer the following statement true (T) or false (F)
In the spring of 2002, the Japanese Ministry of Finance intervened in the foreign exchange market by selling yen and purchasing dollars. Why? And why did the intervention fail?
What will be an ideal response?