Producer surplus is the difference between the
A) price and the willingness to pay for the good.
B) price and the marginal cost of producing the good summed over the quantity sold.
C) willingness to pay for the good and the marginal cost of producing the good summed over the quantity sold.
D) marginal benefit of consuming the good and the marginal cost of producing the good summed over the quantity sold.
B
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A share of stock will pay a dividend of $20 in one year, and will be sold for an expected price of $500 at that time. If the current one-year interest rate is 5%, the current price of the stock will be approximately equal to
A) $100. B) $495. C) $500. D) $525. E) none of the above
Economists widely agree that the Consumer Price Index (CPI) understates the true U.S. inflation rate
a. True b. False