Dollarization will reduce exchange-rate risk for a country.

If Cliff Althoff attends an antique auction, spots a vase that he would be willing to buy at $400, and he is the winning bidder at a price of $400, then Cliff

a. receives $400 in value from this vase b. receives a consumer surplus of $400 c. should not have purchased the vase because consumer surplus is zero d. receives zero value from this vase because consumer surplus is zero e. ended up paying a consumer surplus of $400

Answer the following statement(s) true (T) or false (F)

1. A Paasche price index makes price changes seem better for the consumer than they really are. 2. A Laspeyres price index is based on the basket consumed in the later period.. 3. If the consumer has the same tax bill under a head tax as under an income tax, then the consumer will be indifferent between the two taxes. 4. If the consumer has the same tax bill under a head tax as under an income tax, then less leisure will be consumed under the head tax than under the income tax. 5. The cardinal utility approach has exactly the same implications as the indifference curve approach.