Which of the following is true of consumer surplus?
A. It is used to measure the impact of a change in price on the economic well-being of the producers.
B. It is the net gain in economic well-being associated with producing and selling the equilibrium quantity of a good.
C. It is the difference between the value that one places on a good and the price paid for the good.
D. It is graphically represented as the area under the equilibrium price and above the supply curve of a good.
Answer: C
You might also like to view...
Belize, a country in Central America, has a small coffee industry. Suppose Belize does not have free trade but it has comparative advantage in coffee production. If Belize allowed international trade, what would be the gains from trade?
A) Belize coffee producers would gain from trade. B) Belize coffee consumers would gain from trade. C) Belize would gain tariff revenue from trade. D) All of these answers are gains from trade.
According to the Black-Scholes formula:
a. the value of an in-the-money option will equal the difference between the stock's current price and the strike price. b. the payoff from an average option is either a multiple or a power of the difference between the strike price and the price they are exercised at. c. the holder of a basket option has the right to buy or sell the underlying at the highest price it has attained over the life of the option. d. the price of a call or put option varies with the price of the underlying asset.
A 10 percent increase in the cost of restaurant meals, which are a luxury, will most likely
a. increase the purchase of meals by 10 percent. b. increase the purchase of meals by less than 10 percent. c. decrease the purchase of meals by more than 10 percent. d. decrease the purchase of meals by less than 10 percent.
Which of the following two statements is true of the graph shown below?Statement 1: The graph leads to a supply of labor curve that is positively sloped throughout.Statement 2: The opportunity cost of leisure is lower at point A than at point D. 
A. Statement 1 B. Statement 2 C. Both statements are true D. None of the statements is true