The net gains buyers perceive that they receive, over and above the market price they must pay, are measured by ______.
a. deadweight loss
b. price ceilings
c. consumer surplus
d. producer surplus
c. consumer surplus
You might also like to view...
Which of the following applies to money when it serves as a store of value?
I. Money is a store of value because it is an agreed measure for stating goods' prices. II. The more stable money's value, the better it serves as a store of value. III. When money serves as a store of value, it requires a double coincidence of wants. A) I only B) II only C) I and II D) II and III
A rise in price almost always:
a. leads to an increase in the quantity supplied of that good or service. b. leads to a decrease in the quantity supplied of that good or service. c. has no effect on the quantity supplied of that good or service. d. leads to an increase in the quantity demanded of that good or service.
Economists have noted that businesses of a certain type tend to congregate geographically, attracting workers with skills in those fields. This, in turn, lures more firms seeking employees with those skills. Some examples include commercial banking,
software development, and the automobile industry. What mechanism is at work here? Briefly explain how the mechanism works to the advantage of employers and employees. What will be an ideal response?
A good salesperson can sell $1,000,000 worth of goods, while a poor one can sell only $100,000 worth of goods. Job applicants know if they are good or bad, but the firm does not. A firm will offer job applicants a choice between a fixed salary of $25,000 or 20% commission. Assuming risk-neutral salespersons and the possibility of opportunistic behavior, will this choice of contracts allow the
firm to distinguish between good salespersons and bad ones before the hiring decision is made? What will be an ideal response?