Figure 5-24
Given the demand curve in Figure 5-24, explain how consumer's surplus is calculated.
The area under the demand curve above market price is the consumer's surplus, equal in dollar terms to $36. It represents additional value above market cost for which the consumer does not have to pay.
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The public debt is the
A. accumulation of all past deficits minus all past surpluses. B. amount of U.S. paper currency in circulation. C. ratio of all past deficits to all past surpluses. D. difference between current government expenditures and current tax revenues.
Because of assortative mating, wealth becomes ________ and the distribution of wealth becomes more ________
A) more concentrated in a small number of families; equal B) more concentrated in a small number of families; unequal C) spread out among more families; equal D) spread out among more families; unequal
In an open economy firms sell goods and services to:
A) households, government, and foreigners. B) just households. C) just the government. D) none of the above.
Making a decision "on the margin" involves comparing:
A. additional benefits against additional costs. B. total benefits against total costs, which include benefits and costs from past decisions. C. sunk costs against opportunity costs. D. the most benefit you could expect to get without considering costs.