Suppose Sue's buys a good for $60 on eBay. If the consumer surplus from the sale is $25, Sue would have been willing to pay:
A. $35.
B. $25.
C. $60.
D. $85.
Answer: A
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In a labor market without an efficiency wage, minimum wage, or union wage, when the real wage rate exceeds the equilibrium real wage rate, there is a ________ of labor and the real wage rate will ________
A) surplus; fall B) shortage; fall C) shortage; rise D) surplus; rise E) surplus; not change because only efficiency wages or union wages can change.
A recent article suggests that the introduction of the new iPhone 6 increased the demand for iPhone protective cases. The article suggests that these two goods are
A) substitutes and their indifference curves are close to being straight lines. B) complements and their indifference curves are close to being straight lines. C) substitutes and their indifference curves are close to being L shaped. D) complements and their indifference curves are close to being L shaped.
If the quantity of donuts supplied is represented by the supply equation QS = -15 + 5P, then to solve for the price of donuts, the equation would be rewritten as
A) P = 5QS + 75. B) P = 15 - 0.5QS. C) P = QS - 7.5. D) P = 0.2QS + 3.
A pure public good is one that is
a. rival and excludable b. rival and nonexcludable c. nonrival but excludable d. nonrival and nonexcludable e. provided by a government agency