The difference between the maximum a person is willing to pay and current market price is known as
A. nonprice surplus.
B. market surplus.
C. consumer surplus.
D. producer surplus.
Answer: C
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Average cost is the cost of producing the next unit.
Answer the following statement true (T) or false (F)
The largest proportion of Medicaid spending goes to which of the following groups?
a. Blind and disabled b. Elderly c. Children d. Adults
A typical economy produces thousands of different goods. Is it accurate to say that society faces a production possibilities frontier?
A. No, because two dimensions cannot capture the complexity of a full economy. B. No, although a graph with several thousand dimensions would be appropriate. C. Yes, although society does not face opportunity cost and the model does not apply. D. Yes, because scarcity always imposes opportunity costs. E. Uncertain, economic theory has no answer to this question.
One reason why producers have an incentive to organize in favor of protection is because
A) producer gains are spread across so many firms that no one gets a large share of the benefits. B) producer gains are relatively concentrated. C) there is no real cost to the economy. D) producer gains outweigh consumer losses. E) it is a cheap way to keep their employees happy.