Using supply and demand curve analysis, the triangular area below the equilibrium price and above the supply curve is:
a. consumer surplus.
b. producer surplus.
c. marginal cost

When dealing with externalities, how can we correct market failure?

a) In the case of negative externalities, the market can correct it, but in the case of positive externalities, government regulation is necessary. b) In the case of positive externalities, the market can correct it, but in the case of negative externalities, government regulation is necessary. c) In the case of both positive and negative externalities, market can correct all market failures. d) In the case of both positive and negative externalities, government regulation is necessary to induce market participants to internalize the externality.

Isabella is participating in a first-price sealed-bid auction for a house. If there are 5 other bidders and her maximum willingness to pay for the house is $60,000, what is her optimal bidding strategy?

What will be an ideal response?