The difference between the maximum price a consumer is willing to pay for a product and the actual price the consumer pays is called
A. utility.
B. market failure.
C. consumer demand.
D. consumer surplus.
Answer: D
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Critics of affirmative action programs argue that they
a. promote statistical discrimination. b. impair economic efficiency by preventing firms from freely choosing the most productive employee for a particular job. c. are not as efficient as quota systems at hiring women and minorities. d. All of the above are correct.
Explain why environmental damage would be classified as an externality
When observing people making choices that do not at first appear to be rational, an economist will ask,
a. "How might a psychologist explain this behavior?" b. "Why do we economists keep believing that people behave rationally?" c. "How might such behavior be serving someone's purposes?" d. "What is wrong with these people?"
Higher corporate profit taxes stimulate capital formation in the private sector.
Answer the following statement true (T) or false (F)