What happens to consumer surplus as price falls along a given demand curve?
a. It always increases.
b. It always decreases.
c. It never changes.
d. It increases only if price increases just a little.
e. It depends on the elasticity of demand and supply.
A
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Mrs. Wallace and Mrs. Jackson both signed up for 6 months (each incurred a $200 total payment required in advance, and nonrefundable) at the local workout club. Wallace enjoyed all 6 months
Jackson dropped out after three months due to other unexpected commitments. Which of the following is true? A) Wallace's sunk cost was zero. B) Jackson's sunk cost was $100. C) Jackson's sunk cost was $200, and so was Wallace's. D) Wallace's sunk cost was $100. E) None of the above.
When a country's inflation rate varies substantially from year-to-year and is therefore difficult to predict, this will
a. reduce the volume of trade and the gains derived from it. b. reduce the risk accompanying investment. c. encourage entrepreneurs to innovate and develop better products. d. increase the level of foreign investment in the country.