What do economists call the difference between the most an individual is willing to pay for an item and what the individual actually has to pay?
a. price elasticity
b. consumer surplus
c. indifference curve
d. payment terms
b. consumer surplus
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A consumer has a monthly income of $100 that he wants to spend on two goods: rugs priced at $10 and chairs priced at $5
What is the consumer's opportunity cost of buying a rug? What is his opportunity cost of buying a chair? Use a table to represent the consumer's budget constraint.
Which of the following changes would not shift the demand curve for a good or service?
a. a change in income b. a change in the price of the good or service c. a change in expectations about the future price of the good or service d. a change in the price of a related good or service
The tournament pay explanation is useful in an attempt to explain why
a. very few people actually earn the minimum wage. b. political entrepreneurs can generate campaign contributions from businesses outside of their districts. c. people with only a high school education earn less than those with college degrees. d. some corporate executives earn amounts higher than their marginal revenue product.
A monopolist will hire workers up to the point at which the wage equals the marginal:
A. physical product of labor. B. cost of labor. C. physical product of labor times the price of output. D. physical product of labor times marginal revenue.