If the real interest rate rises, then the
A) quantity of saving decreases and there is a movement down along the supply of loanable funds curve.
B) quantity of saving increases and there is a movement up along the supply of loanable funds curve.
C) supply of saving increases and the supply of loanable funds curve shifts rightward.
D) supply of saving decreases and the supply of loanable funds curve shifts leftward.
E) demand for investment decreases and the demand for loanable funds curve shifts leftward.
B
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Will, Bill, and Phil decide to study an extra hour for an exam. Instead of studying, they could have gone out to eat, played football, or watched TV. Which of the following statements is correct?
A) The benefit the three students receive must be the same because they all make the same choice. B) The marginal cost of the decision is the same if they make the same score on the exam. C) The students could each have different opportunity costs. D) The students made a rational choice as long as they face no scarcity. E) Going out to eat, playing football, and watching TV are all called sunk costs.
If the firm in Figure 17-4 above maintains its set price of P0, rather than dropping price to P1, the loss of consumer surplus due to this decision is
A) J + K. B) K - G. C) G + H. D) H + K.