Consumer surplus is the difference between the most a person is willing to pay and market price.
Answer the following statement true (T) or false (F)
True
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If the price of a pizza were to increase to $50, many people would give up eating pizza while others would continue to eat it. This would indicate
A) those who are buying pizza value it at least $50 per pizza. B) those who are not buying pizza value it more than $50 per pizza. C) only those who are extremely wealthy are buying pizza. D) the price of pizza needs to be regulated by the federal government.
The immediate effect of a bank's purchase of U.S. government securities from the Fed is a(n): a. decrease in the bank's assets
b. increase in the bank's assets. c. decrease in the Fed's assets. d. increase in the Fed's assets. e. decrease in both the bank's and the Fed's assets.
To close an expansionary gap, the Fed ________ interest rates which ________ aggregate spending and ________ short-run equilibrium output.
A. raises; decreases; decreases B. raises; increases; increases C. raises; decreases; increases D. reduces; increases; decreases
Use the IS-LM-PC model to illustrate how the economy adjusts to an increase in taxes both in the short run and in the medium run
What will be an ideal response?