Graphically, the area that represents the difference between the maximum price consumers were willing to pay for a good and the market price is called
a. consumer surplus.
b. producer surplus.
c. marginal cost.
d. triangular arbitrage.
A
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Externalities are
a. side effects passed on to a party other than the buyers and sellers in the market. b. side effects of government intervention in markets. c. external forces that cause the price of a good to be higher than it otherwise would be. d. external forces that help establish equilibrium price.
Refer to the information provided in Table 22.2 below to answer the question(s) that follow. Table 22.2 PointAggregate Income (Y)Aggregate Consumption (C) A 10 14 B 20 23 C 30 25 D 40 26 E 50 34 F 60 39The data in the table was used to estimate the following consumption function: C = 12 + 0.4YRefer to Table 22.2. The error for point C is equal to
A. -1. B. 0. C. +1. D. +2.
In the figure above, at the allocatively efficient level of computer production consumers are willing to give up
A) 0 televisions per computer. B) between 0 and 3 televisions per computer. C) 3 televisions per computer. D) more than 3 televisions per computer.
How would you evaluate the quality of this equation overall? Do you have any concerns? Explain
What will be an ideal response?