What is consumer surplus?
a) a buyer's willingness to pay, minus price
b) a buyer's willingness to pay, plus price
c) the price of the product minus the buyer's willingness to pay
d) the price of the product plus the buyer's willingness to pay
Ans: a) a buyer's willingness to pay, minus price
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When two goods are complements
A) the demands for both goods will be elastic. B) cross price elasticity of demand will be 0. C) cross price elasticity of demand will be negative. D) cross price elasticity of demand will be positive.
Who among the following is a free rider?
a. Ernie listens to National Public Radio, but does not contribute to any fundraising efforts. b. Bert takes the commuter rail to work, but he purchases the discounted monthly passes rather than buying tickets each day. c. Grover sends his 5 children to a private school rather than to the public school in his neighborhood. d. Oscar goes to Elmo's house to watch a football game on the local television channel.
A country with a balance of payments deficit that wants to maintain the current exchange rate:
A. loses foreign assets. B. gains official reserves. C. loses official reserves. D. gains foreign liabilities.
Public education is priced below market price largely as a result of
A. taxpayers who contribute little to the funding of public education. B. under-funded public education. C. rising test scores by students. D. government subsidy programs.