Refer to the accompanying figure. At the equilibrium price, total consumer surplus is:
A. $40 per day.
B. $7.50 per day.
C. $15 per day.
D. $10 per day.
Answer: B
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Peanut butter and jelly are complements for consumers. In 2015, the price of peanut butter increased. As a result, the ________ which lead to ________ in the price of jelly and ________ in the quantity of jelly
A) demand for jelly; a decrease; a decrease B) supply of jelly; a decrease; an increase C) supply of jelly; an increase; a decrease D) demand for jelly; an increase; an increase
Consider a public good such as fire protection services. Rich people may benefit more than the poor from such a service because rich people stand to lose more from a fire that destroys property. In this case
A) the benefits-received principle may support the rich paying more taxes than the poor, but not the ability-to-pay principle. B) the ability-to-pay principle may support the rich paying more taxes than the poor, but not the benefits-received principle. C) neither the benefits-received nor the ability-to-pay principles may support the rich paying more taxes than the poor. D) both the benefits-received and the ability-to-pay principles may support the rich paying more taxes than the poor.
Prospect theory can explain why
A) people tend to gamble on long odds with small expected utility. B) people tend to sell their losing stocks and keep their winning stocks. C) people should only sell their losing stocks. D) people should never play the lottery.
Predatory pricing:
A. is an aggressive business move to maintain market power. B. was used by DeBeers to maintain control over the diamond market. C. is when a firm intimidates others to maintain the high prices the largest firms set. D. All of these statements are true.