If the market does not allocate resources perfectly, the government can.

Jane is willing to pay $4 for the first cup of coffee a day, $2.50 for the second cup, and $1 for the third cup, after which she won't buy any coffee. The price of a cup of coffee is $2.40

Jane's consumer surplus from the coffee she buys is ________ per day. A) $1.60 B) $1.70 C) $4.80 D) $6.50

The FDIC fee system encourages depository institutions to

A. operate their institutions in too conservative a fashion. B. seek only a modest rate of return. C. make riskier loans than they would otherwise. D. reject loans that probably would have been profitable.