Which statement best describes social surplus?
a. the sum of consumer surplus and producer surplus
b. the amount that a seller is paid for a good minus the seller’s actual cost
c. the amount that individuals would have been willing to pay, minus the amount that they actually paid
d. when it is impossible to improve the situation of one party without imposing a cost on another
a. the sum of consumer surplus and producer surplus
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Which of the following characteristics of a production possibilities frontier indicates that trade-offs must be made?
A. The downward slope B. The upward slope C. The constant slope D. The curvature
Consumption functions would shift downward if
A. disposable incomes fall. B. disposable incomes rise. C. price levels fall. D. price levels rise.
Commercial banks do NOT
A) buy U.S. government Treasury bills. B) accept deposits from their customers. C) make loans to creditworthy individuals and businesses. D) determine what assets are money.
The supply of labor to one industry will decrease when
A) the price of leisure activities falls. B) the income effect dominates the substitution effect. C) the demand for labor falls in the industry. D) workers receive better employment opportunities in other industries.