The principle of comparative advantage explains specialization and trade among countries but not among individuals.
Answer the following statement true (T) or false (F)
False
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Each person goes about her daily business seeking to maximize her own self interests. In doing so, she contributes to the welfare of society at large. This is the idea underlying Adam Smith's "invisible hand."
Indicate whether the statement is true or false
Explain why the price elasticity of demand changes along a linear demand curve
What will be an ideal response?
A firm's markup over its marginal cost is greater:
A. the more elastic is the demand curve. B. the less elastic is the demand curve. C. the lower its fixed costs. D. the lower its average costs.
Bryce saw a motorcycle for sale online. He had been wanting that model of motorcycle and was willing to pay $5,000. The one he saw online was listed for $3,500, so he immediately bought it. In this case, how much was the consumer surplus?
a. $1,500 b. $3,500 c. $5,000 d. $8,500