An increase in demand will always
A. increase consumer surplus.
B. increase producer surplus.
C. decrease consumer surplus and increase consumer surplus.
D. increase producer surplus and increase consumer surplus.
Answer: D
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In the used car market without warranties, adverse selection results in
A) sellers of "lemons" claiming that their car is a lemon. B) only lemons being available for sale. C) the market price of used cars equal to that of good used cars. D) all of the above.
Refer to Figure 4-1. If the market price is $2.00, what is the consumer surplus on the second burrito?
A) $0 B) $1.00 C) $2.00 D) $4.50
In the simple accelerator theory an
A) increase in actual sales will always lead to an increase in investment. B) increase in actual output will not lead to an increase in expected sales. C) increase in actual sales will lead to an increase in replacement investment. D) increase in the size of the increase in actual sales will lead to an increase in next period's net investment.
The cross-price elasticity of demand for peanut butter and jelly is likely:
A. a positive number. B. a very high positive number. C. a negative number. D. less than one.