The buyer's reservation price for a particular good or service is the:

A. price the buyer must pay to ensure he or she gets it.
B. largest price the buyer would be willing to pay for it.
C. smallest price the buyer would be willing to pay for it.
D. same as the market price.


Answer: B

Economics

You might also like to view...

Why do preference reversals occur?

What will be an ideal response?

Economics

In 2003, Congress passed a tax cut that included a reduction in the marginal tax rate on stock dividends. This essentially increased the after-tax rate of return on stocks that offer dividends

Using the loanable funds market, describe what will happen to saving, investment, economic growth, the real interest rate, and the quantity of loanable funds exchanged.

Economics

One event that undermined the belief that the Phillips curve represented a structural relationship was

A) the belief of Milton Friedman and Edmund Phelps that expected inflation remains constant. B) the erratic behavior of unemployment rates and inflation rates during the 1960s. C) the extended period of time that both unemployment and inflation remained high during the Great Depression. D) the increase in both the inflation rate and the unemployment rate in the 1970s.

Economics

In a market supply and demand graph, the socially efficient outcome occurs

a. Where the private marginal benefits intersect with the social marginal costs b. Where the private marginal benefits intersect with the private marginal costs c. Where the social marginal benefits intersect with the social marginal costs d. Where the social marginal benefits intersect with the private marginal costs e. Where externalities are maximized

Economics