Consumer surplus is
A) the total difference between the total amount that consumers actually pay for an item and the total amount that they would have been willing to pay.
B) the total difference between the total costs firms incur in producing an item and the utility consumers derive from purchasing the item.
C) the total difference between the total amount that consumers would have been willing to pay for an item and the total amount that they actually pay.
D) the total difference between the utility consumers derive from purchasing an item and the total costs firms incur in producing the item.
Answer: C
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Refer to the figure above. What is the total surplus before Lithasia opens up to free trade?
A) $10 B) $20 C) $30 D) $40
In 2009, the top 1% of all income earners paid _________ percent of federal taxes.
A. 1.0 B. 4.1 C. 15.6 D. 22.3
The major limitation of both the Keynesian approach and the monetarist approach is that both
a. focus on the determination of interest rates to the exclusion of price levels. b. study the determination of real GDP equilibrium without including the price level. c. are ways of studying the aggregate demand curve, but to learn anything about the price level and output, the aggregate supply curve must be included in the analysis. d. concentrate on interest rates without considering changes in consumption or net exports.
After an increase in the demand for construction workers, the market will attain its new long-run equilibrium faster if
A. people ignore the shortage in the short run. B. wages are flexible. C. wages are inflexible, forcing new people to enter the market. D. unions restrict the number of new construction workers.