Total surplus is
A. the sum of consumer’s surplus plus producer’s surplus.
B. the consumer’s surplus minus the producer’s surplus.
C. the product price minus the sum of consumer’s surplus and producer’s surplus.
D. consumer surplus minus marginal utility of the produce.
Answer: A
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Human capital is, in part, the
A) amount of money held by a worker. B) stock of knowledge of a worker. C) stock of plant and equipment. D) stock of financial assets held by the public.
Suppose you hit a progressive jackpot on a 25-cent Fortunemaker slot machine in a casino in Las Vegas and are given the choice of the following prizes:
Prize 1: $200,000 to be received right away, with four additional payments of $200,000 to be received each year for the next four years. Prize 2: $750,000 to be received right away. If the interest rate is 3 percent, what is the present value of each prize?
A decrease in price will result in an increase in total revenue if:
A) the percentage change in quantity demanded is less than the percentage change in price. B) the percentage change in quantity demanded is greater than the percentage change in price. C) demand is inelastic. D) the consumer is operating along a linear demand curve at a point at which the price is very low and the quantity demanded is very high.
When market exchange occurs voluntarily in a competitive market
a. choice incurs no opportunity cost b. the sum of consumer surplus and producer surplus is maximized c. both consumer surplus and producer surplus are eliminated d. buyers benefit at the expense of producers e. the exchange confers no net benefit to the participants