Which of the following best explains the source of consumer surplus for Good A?
a. Many consumers pay prices that are greater than the equilibrium price of Good A
b. Many consumers would be willing to pay more than the market price for some units of Good A.
c. Many consumers think the market price of Good A is greater than its cost.
d. Many consumers of Good A place a value on it that is less than the market price.
b
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The use of debt financing to purchase food, clothing, vacations, and other non-durable items
A) is prudent as long as you have an unused balance on your credit card. B) is imprudent because such purchases will mean that you will soon be making payments on items that have you have already consumed. C) is prudent as long as you plan to save more in the future. D) is imprudent unless you need to purchase these items to impress your friends.
A monopoly produces widgets at a marginal cost of $20 per unit and zero fixed costs. It faces an inverse demand function given by P = -100 ? 4Q. Suppose fixed costs rise to $401. What happens in the market?
A. The firm will reduce its output and raise price. B. The firm will raise the price. C. The firm will continue to produce the same output and charge the same price. D. The firm will shut down immediately.
The idea that a tax reduction funded by government borrowing has no effect on aggregate demand is known as
A. the Ricardian equivalence theorem. B. the Keynesian Cross. C. the expenditure-offset theorem. D. the balanced budget multiplier.
Is the United States a service economy? Explain based on the types of personal consumption expenditures
What will be an ideal response?