The figure above shows the supply and demand curves for pizza. If the market is at its competitive equilibrium, what area in the graph above represents:
a. consumer surplus?
b. producer surplus?
a. AFB
b. BFC
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In the above figure, the economy is initially at point B. If the exchange rate falls, there is
A) a movement to point C. B) a movement to point A. C) a shift to AD2. D) a shift to AD1.
The first fundamental theorem of welfare economics states that
A) under certain conditions, a competitive equilibrium is Pareto optimal. B) a competitive equilibrium is always Pareto optimal. C) under certain conditions, a Pareto optimum is a competitive equilibrium. D) a Pareto optimum is always a competitive equilibrium.
An example of a derivative is a:
A. futures contract. B. stock. C. bond. D. fixed-income security.
Spending VCU4 on real-world goods and services causes the nation's:
a. Demand for real goods and services to remain the same and monetary base to rise. b. Demand for real goods and services to remain the same and M2 money supply to rise. c. Demand for real goods and services to rise and M2 money multiplier to fall. d. Demand for real goods and services to rise and monetary base to remain the same.