Anna was willing to pay $130,000 for Betty’s house, which was listed at $125,000, but Anna could only afford to spend $120,000. After negotiating, Betty sold Anna the house for $120,000. How does consumer surplus apply to this situation?
a. The consumer surplus is indeterminable because we do not know how much Betty paid for the house.
b. The consumer surplus is $5,000 because Anna got Betty to lower her price by that amount.
c. The consumer surplus is $10,000 because Anna was willing to pay that much more than she did.
d. There is no consumer surplus because Anna did not pay less than she was willing and able to pay.
d. There is no consumer surplus because Anna did not pay less than she was willing and able to pay.
You might also like to view...
Why are public goods provided by the government, rather than by the private sector?
A) because they are large-scale projects that require the kind of financing only governments can generate through the issuance of bonds B) because it would be difficult for a private sector firm to make a profit providing a public good, since consumers who benefit would not have to pay for it C) because no one really benefits from public goods D) because private sector firms do not have the foresight to plan for public goods
Which of the following is not an interest-earning asset of commercial banks?
a. Required reserves. b. Checkable deposits. c. Customer savings accounts. d. All of the above are interest-earning assets of commercial banks. e. None of the above are interest-earning assets of commercial banks.