Consumer's surplus
a. is the gap between total willingness to pay and the total market value of a good.
b. guarantees that the market value of a good in money is equal to the total economic value of the good.
c. is always negative because of diminishing marginal utility.
d. is the total area under a consumer's demand curve.
a
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What is the approximate cost to a professional basketball team of giving ten free tickets for a particular game to children in an orphanage?
A) Probably nothing if the game is not sold out. B) The face price of the tickets C) The value of the opportunities forgone by putting on the game, divided by the number of seats (times ten) D) We cannot tell unless we know the value the orphans place on attending.
Economists Gary Becker and Kevin Murphy are associated with which of the following?
A) They discovered that price changes have both income and substitution effects. B) They have argued that social factors are not important in explaining the choices consumers make. C) Consumers appear to receive utility from consuming goods they believe are popular. D) They discovered the first example of a Giffen good.
According to the new Keynesian school of thought, fiscal policy is a completely ineffective tool in combating supply-side shocks
a. True b. False Indicate whether the statement is true or false
A Constitutional amendment requiring that the federal government budget be balanced annually would have
A. overall positive impact upon the economy during any stage of a business cycle. B. an automatic stabilizing impact upon the economy. C. an automatic destabilizing impact upon the economy. D. overall neutral impact upon the economy.