What is producer surplus? What does producer surplus measure?
What will be an ideal response?
Producer surplus is the difference between the lowest price a firm would be willing to accept for a good or service and the price it actually receives. Producer surplus measures the net benefit received by producers from participating in a market.
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A stock variable
a. measures a process that takes place over a period of time b. is used often used to measure the quantity demanded of a good at various prices c. is related to inventory controls d. measures a quantity in existence at a moment in time e. is a definition unique to economics
An optimal decision is one that chooses the most desirable from among all possibilities that are available
a. True b. False Indicate whether the statement is true or false
Which of the following statements is most correct?
A. When the real interest rate increases the reward for saving decreases. B. When the real interest rate decreases the cost of current consumption increases. C. When the real interest rate decreases current consumption becomes less expensive and the reward for saving decreases. D. When the real interest rate increases the level of saving always decreases.
A natural monopoly has
A. many producers of the same product. B. easy access to the market. C. a single firm providing the industry's output. D. one buyer of output.