Andrew buys yogurt, and he would be willing to pay more than he now pays. Suppose that Andrew has a change in his tastes such that he values yogurt more than before. If the market price is the same as before, then
a. Andrew's consumer surplus would be unaffected.
b. Andrew's consumer surplus would increase.
c. Andrew's consumer surplus would decrease.
d. Andrew would be wise to buy less yogurt than before.
B
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Explain the infant industry argument case against free trade
What will be an ideal response?
The new classical school holds that: a. macroeconomic equilibrium is achieved only through active government intervention. b. unemployment is only temporary, because the economy tends naturally toward equilibrium. c. rigid prices and wages prevent the economy from achieving equilibrium. d. macroeconomic equilibrium cannot occur as long as the aggregate supply curve isvertical
e. rational expectations result in involuntary unemployment and prolonged periods of macroeconomic disequilibrium.