Consumer surplus is
A. the difference between the maximum a person is willing to pay and full costs of productions for the firm.
B. the difference between the maximum a person is willing to pay and current market price.
C. current market price.
D. the difference between current market price and full costs of production for the firm.
Answer: B
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Which of the following trade-offs does the production possibilities frontier illustrate?
a. If an economy wants to increase efficiency in production, then it must sacrifice equality in consumption. b. Once an economy has reached the efficient points on its production possibilities frontier, the only way of getting more of one good is to get less of the other. c. For an economy to consume more of one good, it must stop consuming the other good entirely. d. For an economy to produce and consume goods, it must sacrifice environmental quality.
Supply-siders ignore the effects of tax cuts on
A. aggregate demand. B. aggregate supply. C. aggregate demand and aggregate supply. D. none of these.
If demand for a product increases, ceteris paribus, the equilibrium:
A. price increases. B. price decreases. C. price remains unchanged. D. quantity decreases.
The sum of the utilities from each possible outcome of a situation weighted by the probability of that outcome is known as
A. marginal utility. B. expected utility. C. total utility. D. expected value.