Define “consumer surplus.”
Please provide the best answer for the statement.
Consumer surplus is the benefit surplus received by a consumer or consumers through market transactions. A consumer surplus arises because all consumers pay the equilibrium price even though some consumers would be willing to pay more. Consumer surplus is measured as the difference between the maximum price a consumer is (or consumers are) willing to pay minus the actual price.
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Assume that full-employment real GDP is Y = $1,200 billion, the current equilibrium real GDP is Y = $800 billion, and the MPC is 0.50 . What level of aggregate expenditures will close the recessionary gap?
a. $50 billion. b. $80 billion. c. $140 billion. d. $200 billion. e. $400 billion.
How does the phenomenon of diminishing returns to capital explain the catch-up effect?
Informal liquidation is also known as
a. assignment b. bankruptcy c. reorganization d. removal of assets e. selling the business
Refer to the above table. Suppose the price of A increases from $10 to $12. What is the cross price elasticity of demand between A and C?
A. +7.06 B. -7.06 C. -0.292 D. +0.292