The Market for Strawberries Is Perfectly Competitive

question 33

Multiple Choice

The market for strawberries is perfectly competitive. Joe and Haley are consuming the same amount of strawberries, but Joe's demand is much more elastic than Haley's. Which statement is true?

• A)Joe's consumer surplus exceeds Haley's.
• B)Haley's consumer surplus equals Joe's.
• C)Haley's consumer surplus exceeds Joe's.
• D)In comparing consumer surpluses, no statement can be made.
• E)Any comparison of consumer surplus depends on the price of strawberries.

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Definitions:

Spot Rate

The current market price used to directly exchange one currency for another, for immediate delivery.

Forward Rate

The agreed-upon exchange rate for a currency transaction that will occur at a future date.

Average Rate

The average rate is a mean exchange rate over a specified period, used for accounting purposes to convert foreign currencies into the functional currency.

Foreign Exchange Gain

A profit resulting from changes in the exchange rate between the base currency and the foreign currency in which a transaction is denominated.