A fall in the price level would lead to an increase in consumption according to ________ because ________
A) Friedman; the value of assets fall
B) Modigliani; the value of assets fall
C) Friedman; the value of assets rise
D) Modigliani; the value of assets rise
D
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If one producer has control over an entire market and underproduces, the producer will
A) increase producer surplus by lowering pollution costs. B) increase consumer surplus by lowering producer surplus. C) increase both consumer and producer surplus. D) create a deadweight loss. E) decrease the deadweight loss that would exist if the market were efficient.
Chuck Stake never eats vegetables, although he can afford to buy them. According to the economic way of thinking, Chuck
A) must have a serious physiological aversion to vegetables. B) was probably forced to eat them as a kid, and now hates them. C) believes the additional benefits from eating vegetables are outweighed by the additional costs. D) has studied economics enough to know that nobody needs to eat their vegetables.