Refer to Table 4-2. The table above lists the highest prices five consumers are willing to pay for a concert ticket. If the price of one ticket falls from $50 to $20
A) everyone will buy a ticket. B) consumer surplus decreases from $48 to $24.
C) only three tickets will be sold. D) consumer surplus increases from $0 to $62.
D
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According to real business cycle theory, business cycles
a. can be eliminated with appropriate monetary and fiscal policy. b. are natural and efficient reactions to changes in productivity. c. do not occur. d. occur infrequently. e. none of the above.
The Hicks family owns a blueberry farm in Maine. The Ward family owns a blueberry farm in Massachusetts. A drought in Massachusetts destroys half of the Ward family's harvest for one year. For the Ward family, their
a. transitory income for the year of the drought likely exceeds their permanent income. b. permanent income likely exceeds their transitory income for the year of the drought. c. transitory income likely will be affected but the permanent income of the Hicks family will increase. d. permanent income likely will be affected but the permanent income of the Hicks family will not be affected.