What is meant by producer surplus? How is producer surplus in a competitive market calculated?
What will be an ideal response?
Producer surplus is the difference between the supply curve and the price the consumer pays. Graphically, producer surplus is calculated as the area above the supply curve and below the equilibrium price.
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If Janet Yellen, Chair of the Federal Reserve Board, begins to tighten monetary policy by raising US interest rates next year, what is the likely impact on the value of the dollar?
a. The value of the dollar falls when US interest rates rise. b. The value of the dollar rises when US interest rates rise. c. The value of the dollar is not related to US interest rates. d. This is known as Purchasing Power Parity or PPP. e. The Federal Reserve has no impact at all on interest rates.
Since price tends to equal total utility, the price of water is low and the price of diamonds is high.
Answer the following statement true (T) or false (F)