How do you calculate consumer’s surplus? What happens to consumer’s surplus when the price of a commodity rises?
What will be an ideal response?
Consumer’s surplus = Total utility (in money terms)?Total expenditureAmount of consumer’s surplus will decrease when price rises because part of the consumer’s surplus will be taken away by the supplier in the form of a higher price.
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A good example of central planning at work in the U.S. is:
A. McDonald's fries being the same everywhere. B. New York City's rent control program. C. car manufacturers establishing suggested retail prices. D. unions working with businesses to establish wages.
Due to a recession in the US, the average rate of return on investments is likely to fall causing the demand for US dollar to
a. Increase b. Decrease c. Not change d. None of the above
All of the following are characteristics of a perfectly competitive market, except one. Which is the exception?
a. a large number of sellers b. a standardized product c. no barriers to entry d. sellers can easily exit the market e. an intensive rivalry among the sellers
The difference between a supply schedule and a supply curve is that a supply schedule
a. incorporates demand and a supply curve does not. b. incorporates profit and a supply curve does not. c. can shift, but a supply curve cannot shift. d. is a table, and a supply curve is drawn on a graph.