Suppose Ferd truthfully tells the car dealer the maximum amount he's willing to pay for a Ford Mustang: $20,000 . The dealer says, "You're in luck; we have one on the lot for $20,000." Which of the following statements is true?
a. Ferd will not buy the car.
b. The car is not worth $20,000.
c. Ferd gets $20,000 in consumer surplus.
d. Ferd gets no consumer surplus.
e. The dealer earns $20,000 in consumer surplus.
D
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Which of the following is the best definition of economic growth?
A) the opportunity cost of capital B) the sustained expansion of production possibilities C) the investment in capital and consumption goods by an economy D) increased development of land and entrepreneurship E) the opportunity cost of consumption
When unions or legislation makes it necessary for a firm to pay higher wages,
A) efficiency declines. B) income is transferred from wealthy people to poor people. C) the marginal value of retained employees falls. D) the marginal value of retained employees rises. E) total purchasing power increases.