The difference between the maximum price the consumer is willing to pay and the price the consumer actually pays for a product is referred to as:
a. market surplus
b. market shortage
c. buyer surplus
d. seller surplus.
c
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Describe how each of the following changes would affect the equilibrium in the labor market in terms of the level of the real wage and quantity of employment in equilibrium:
(a) Increased immigration leads to higher labor supply at each real wage (b) The effort curve makes a parallel shift upward (c) Labor productivity increases (that is, the marginal product of labor increases at each level of employment).
If a detrimental externality is being produced in the course of producing a good, then
A. P > MSC. B. MSC < MPC. C. incidental costs are negative. D. output is inefficiently large.
Comparisons of GDP levels across countries are least accurate when:
A. prices differ across countries and nonmarket activities are a large part of total economic activity. B. purchasing power parity prevails. C. prices differ across countries. D. nonmarket activities are a small part of total economic activity.
Average living standards are best measured using
A. Per capita GDP. B. The capital stock of the economy. C. The economic growth of the economy. D. GDP.