Optimization in levels calculates:
A) only the costs of an alternative and not the benefits.
B) the total net benefits of different alternatives.
C) the change in net benefits resulting from a shift from one alternative to another.
D) only the benefits of an alternative and not the costs.
B
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The total amount of producer surplus in a market is equal to
A) the area between the demand curve and the supply curve below the market price. B) the difference between quantity supplied and quantity demanded. C) the area above the market supply curve. D) the area above the market supply curve and below the market price.
If the demand for foodstuffs is inelastic, which of the following positions would be most beneficial to Farmer Jones?
A) Bad weather for Jones and good weather for all other farmers. B) Bad weather for all farmers except Jones (who witnesses good weather). C) Bad weather for all farmers. D) Good weather for all farmers. E) There is not enough information to answer the question.