The difference between the maximum amount a person is willing to pay for a given quantity of a good and the amount actually paid for that quantity is called
a. producer surplus
b. the substitution effect
c. price discrimination
d. the income effect
e. consumer surplus
E
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If Px = Py, then when the consumer maximizes utility,
A) X must equal Y. B) MU(X) must equal MU(Y). C) MU(X) may equal MU(Y), but it is not necessarily so. D) X and Y must be substitutes.
A major difference between a partnership and proprietorship is that with a partnership,
a. the liability for each individual is limited by the wealth of the others b. the liability for each partner is proportionate to his or her investment c. profits increase with each new partner d. the business has greater investment resources than proprietorships e. only the shareholders face losses
All of the following would be included in planned aggregate expenditure EXCEPT:
A. sales to foreigners of domestically-produced goods. B. social security payments. C. planned changes in inventories. D. purchases of services provided by government employees.
When the price of apples goes up:
A. the demand for apples will decrease, ceteris paribus. B. the demand for apples will increase, ceteris paribus. C. the quantity of apples demanded will decrease, ceteris paribus. D. the quantity of apples demanded will increase, ceteris paribus.