Consumer surplus is
A) the total difference between the total amount that consumers actually pay for an item and the total amount that they would have been willing to pay.
B) the total difference between the total costs firms incur in producing an item and the utility consumers derive from purchasing the item.
C) the total difference between the total amount that consumers would have been willing to pay for an item and the total amount that they actually pay.
D) the total difference between the utility consumers derive from purchasing an item and the total costs firms incur in producing the item.
C
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The overall level of well-being enjoyed by an individual is known as ________.
A. the real GDP B. the growth rate C. the national income D. the standard of living
Figure 4-12
Refer to . The supply curve S and the demand curve D1 indicate initial conditions in the market for college textbooks. A new government program is implemented that grants students a $30 per textbook subsidy on every textbook they purchase, shifting the demand curve from D1 to D2. Which of the following is true for this subsidy given the information provided in the exhibit?
a.
Textbook buyers will receive an actual benefit of $10 from the subsidy, while textbook sellers will receive an actual benefit of $20 from the subsidy.
b.
Textbook buyers will receive an actual benefit of $20 from the subsidy, while textbook sellers will receive an actual benefit of $10 from the subsidy.
c.
Textbook buyers will receive the full $30 benefit from the subsidy.
d.
Textbook sellers will receive the full $30 benefit from the subsidy.
Two identical firms compete as a Cournot duopoly. The demand they face is P = 100 ? 2Q. The cost function for each firm is C(Q) = 4Q. In equilibrium, the deadweight loss is:
A. $512. B. $384. C. $256. D. $128.
Deregulation of the telephone industry has reduced price competition and the volume of telephone service, ceteris paribus.
Answer the following statement true (T) or false (F)