Consumer surplus
A. is the difference between the minimum price producers are willing to accept for a product and the higher equilibrium price.
B. is the difference between the maximum price consumers are willing to pay for a product and the minimum price producers are willing to accept.
C. is the difference between the maximum price consumers are willing to pay for a product and the lower equilibrium price.
D. rises as equilibrium price rises.
Answer: C. is the difference between the maximum price consumers are willing to pay for a product and the lower equilibrium price.
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The four factors of production (or types of resources) are
A. labor, capital, technology, and entrepreneurial ability. B. land, labor, capital, and entrepreneurial ability. C. labor, capital, entrepreneurial ability, and money. D. land, labor, capital, and money.
The United States has an absolute advantage in producing sugar over all of the other sugar producing countries. Does this fact mean that we should not import any sugar from the other countries?
What will be an ideal response?
An increase in a retailer's "overhead expenses"
A) compels the retailer to raise prices. B) enables the retailer to raise prices. C) makes it profitable for the retailer to raise prices. D) does not in itself make higher prices necessary, possible, or profitable.
A result of a positive externality in the production of a good is that
A) the price system will over-allocate resources to the production of that good or service. B) the price system will under-allocate resources to the production of that good or service. C) the market supply will be too high. D) the market demand will be too high.