If Ming Is Willing to Pay $75 to Attend the Broadway

question 36

True/False

If Ming is willing to pay $75 to attend the Broadway production of The Lion King but actually pays $40, she receives a consumer surplus of $35.

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Definitions:

Treasury Bond

A long-term, fixed-interest government debt security with a maturity of more than 10 years issued by the U.S. Department of the Treasury.

Yield To Maturity

The total return anticipated on a bond if the bond is held until it matures, which includes all remaining coupon payments and the repayment of the principal.

Credit Risk

The risk of loss due to a borrower's failure to make payments on any type of debt.

Sovereign Default

The failure of a country's government to meet its bond payment obligations, or to honor its debt agreements.