The net gain to society from the operation of a competitive market in equilibrium is
A. consumer surplus only.
B. the profits of the producers.
C. the sum of consumer surplus and producer surplus.
D. producer surplus only.
Answer: C
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If the cross elasticity of demand between goods X and Y is positive and between goods X and Z is negative, then X and Y are ________ and X and Z are ________
A) price inelastic; complements B) complements; substitutes C) substitutes; complements D) price inelastic; income elastic
An argument supporting promotion of the urban informal sector is
(a) the formal sector is incapable of providing enough employment. (b) informal sector workers are poorly educated. (c) it uses a relatively high capital intensity. (d) it would reduce urban bias.
Total surplus:
A. is the total amount spent on a good in a market. B. is producer surplus minus consumer surplus. C. is producer and consumer surplus combined. D. is consumer surplus minus producer surplus.
Some colleges charge for student parking. Currently, your college does not charge for parking but the administration announced a possible charge of $2 per day. You are not sure when the new parking policy will start; therefore you decide to keep a $5 bill in your wallet. You hold to $5 for the:
A. impulsive motive. B. money creation motive. C. speculative motive. D. precautionary motive.