Producer surplus is given by the area
A. below the demand curve.
B. below the demand curve but above the price.
C. below the supply curve.
D. above the supply curve but below the price.
Answer: D
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The figure above shows a labor market. If there is a monopsony in this labor market, then increasing the minimum wage from $3 per hour to $5 per hour
A) will increase the quantity of labor employed. B) will leave unchanged the quantity of labor employed. C) will decrease the quantity of labor employed. D) could increase, decrease, or leave unchanged the quantity of labor employed.
The negative correlation between the vacancy rate and the unemployment rate is called
A) The Laffer curve. B) The Phillips curve. C) The Fisher relation. D) The Beveridge curve.
Which of the following statements is not true with regard to automatic stabilizers? a. The most important automatic stabilizer is the tax system
b. They act as shock absorbers to the economy. c. They require legislative action. d. Automatic stabilizers like government transfer payments change as business cycles conditions change.
Suppose people believe that prices will continue to fall in the future, and so they put off buying things now. As a result, prices fall. In economics we refer to this as a(n):
A. precommitment strategy. B. self-confirming equilibrium. C. Nash equilibrium. D. endowment effect.