Producer surplus is the
a. area under the supply curve to the left of the amount sold.
b. amount a seller is paid minus the cost of production.
c. area between the supply and demand curves, above the equilibrium price.
d. cost to sellers of participating in a market.
b
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Nancy's utility of wealth curve is given in the above figure. Option A gives Nancy $100 for sure. Option B gives Nancy $50 half the time and $150 half the time. Nancy's expected utility of option A
A) is greater than the expected utility of option B. B) is the same as the expected utility of option B. C) is less than the expected utility of option B. D) could be either greater or less than the expected utility of option B.
Which one of the following is an example of a normative statement?
A) A digital camera costs more than a disposable camera. B) Most digital cameras sold in the United States are imported from other countries. C) A camera makes a good wedding gift. D) More people will buy digital cameras as their prices decline.
Which of the following is the most liquid?
A) certificate of deposit B) cash C) checkable and debitable account D) stocks and bonds
Which of the following actions by the Fed would be most likely to stimulate the economy?
A) Purchasing bonds on the open market. B) Increasing interest rates from 3% to 5% to encourage more savings. C) Increasing the required reserve ratio to ensure that banks stay solvent. D) Raising the discount rate charged to commercial banks.