Everyone refers to Jerry as "Big Guy.". He is 6'4" tall and weighs 275 pounds (he says). It's probably closer to 300 pounds. Jerry loves hamburgers. He ate 4 of them at McDonald's one evening. He figured the last one was just worth the $1 price he paid. If his demand curve for hamburgers is downward sloping, then he
a. gained no consumer surplus because his demand curve is downward sloping
b. would have gained consumer surplus if he had eaten one more hamburger
c. gained consumer surplus on each of the four he consumed
d. gained consumer surplus only on the first three hamburgers
e. gained $1 consumer surplus on the fourth hamburger alone
D
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A Keynesian short-run aggregate supply curve has a flatter portion and a steep portion. How does a decrease in aggregate demand affect the actual real GDP differently across these two portions?
a. There is a large decrease in the actual real GDP across the flatter portion and a small decrease in the actual real GDP across the steep portion. b. There is a large increase in the actual real GDP across the flatter portion and a small increase in the actual real GDP across the steep portion. c. There is a small decrease in the actual real GDP across the flatter portion and a large increase in the actual real GDP across the steep portion. d. There is a small increase in the actual real GDP across the flatter portion and a large increase in the actual real GDP across the steep portion.
Which of the following would most likely occur if the federal government increased its spending and enlarged the size of the budget deficit during a period of full employment?
A. The rate of inflation would decline. B. The rate of inflation would rise. C. A recession would develop. D. Interest rates would fall.