Which of the following statements is correct about the concept of willingness to pay?
A) The willingness to pay is the lowest price that a buyer is willing to pay for an extra unit of a commodity.
B) The willingness to pay for a commodity increases exponentially as the consumption of the commodity increases.
C) The willingness to pay for a commodity increases linearly as the consumption of the commodity increases.
D) If a consumer is consuming 10 units of a commodity and he is ready to pay $2 for the eleventh unit, his willingness to pay for the eleventh unit is $2.
D
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Imagine that Wingate National is a new bank, and that the legal reserve requirement is 10 percent. If it accepts a $1,000 deposit, then it alone can increase the money supply by
a. $900 b. $910 c. $1,000 d. $9,000 e. $10,000
Suppose that in Belize, the opportunity cost of producing a sailboat is 5 hang gliders. In Honduras, the opportunity cost of producing a sailboat is 8 hang gliders
a. What is the opportunity cost of producing a hang glider for Belize? b. What is the opportunity cost of producing a hang glider for Honduras? c. Which country has a comparative advantage in the production of hang gliders? d. Which country has a comparative advantage in the production of sailboats?