Which describes the economic meanings of value and price?
A) Value is exchange worth minus marginal benefit, and price is the dollars that must be paid.
B) Value is the marginal benefit obtained, and price is the dollars that must be paid.
C) Value refers to the gain the producer gets from the good or service, and price refers to the gain the consumer gets from the good or service.
D) Value refers to the dollars that must be paid, and price refers to the cost of producing the good.
E) They are the same and both mean the dollars that must be paid.
B
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Producer surplus is:
a) equal to the area under the supply curve. b) the difference between the maximum price consumers are willing to pay and the minimum price producers are willing to accept. c) the total amount paid for the good. d) the price received for a good minus its marginal cost, summed over the quantity sold. e) equal to the opportunity cost of production.
Refer to the diagram. A government-set price floor is best illustrated by:
A. price A.
B. quantity E.
C. price C.
D. price B.