Answer the following statements true (T) or false (F)
1. Economic theory and economic policy are synonymous.
2. Your decision to attend college was a microeconomics choice.
3. Goods directly used by individuals and households are known as capital goods.
4. The relationship between the price of a book and the number of volumes purchased would be an example of microeconomics.
1. FALSE
2. TRUE
3. FALSE
4. TRUE
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The figure illustrates the market for bagels. Initially the market is in equilibrium, Then the number of bagels produced is cut from 20 to 10 an hour and the price rises to $2.00 per bagel. Consumer surplus decreases by ________
A) $5.00 an hour B) $2.50 an hour C) $7.50 an hour D) $0.50 a bagel
In a perfectly competitive market, if all firms face identical, constant marginal marginal cost curves, then consumer surplus is
A) the area beneath the market demand curve and above the market clearing price. B) the area above the market demand curve and above the market clearing price. C) the total area beneath the market demand curve. D) definitely zero.