Total surplus refers to the sum of consumer surplus and producer surplus
a. True
b. False
Indicate whether the statement is true or false
True
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Use the following statements to answer this question. I. To maximize profit, a firm will advertise more when the advertising elasticity is larger. II. To maximize profit, a firm will advertise more when the price elasticity of demand is smaller
A) Both I and II are true. B) I is true, and II is false. C) I is false, and II is true. D) Both I and II are false.
Jaime's father gives her a pen for her graduation from college, but Jaime wants a smartphone. This implies that
A) Jaime's father is not acting out of self-interest because he knows that she really wants a smartphone. B) Jaime's father is acting out of self-interest because he wants to give her something useful. C) Jaime is not acting out of her self-interest by wanting something different from what her father gives her. D) Jaime is not rational by asking for a smartphone instead of a pen.
A business incurs the following costs per unit: Labor - $125/unit; Materials $45/unit and rent - $250,000/month. If the firm produces 1,000,00 . units a month, the total variable costs equal
a. $125Million b. $45Million c. $1Million d. $170Million
Assume that a college student purchases only Ramen noodles and textbooks. If Ramen noodles are an inferior good and textbooks are a normal good, then the income effect associated with a decrease in the price of a textbook will result in
a. a decrease in the consumption of textbooks and a decrease in the consumption of Ramen noodles. b. a decrease in the consumption of textbooks and an increase in the consumption of Ramen noodles. c. an increase in the consumption of textbooks and an increase in the consumption of Ramen noodles. d. an increase in the consumption of textbooks and a decrease in the consumption of Ramen noodles.