What does producer surplus measure?
a) the well-being of society as a whole
b) the well-being of sellers
c) the well-being of buyers and sellers
d) the well-being of buyers
Ans: b) the well-being of sellers
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The opportunity cost of an activity means the:
a. amount of money the activity costs. b. number of hours that is required to engage in this activity. c. expected gains by engaging in the activity. d. amount of other things that must be sacrificed in order to engage in the activity. e. expected gains minus the expected costs of engaging in the activity.
If the price level does not fall or only falls very slowly, then the result will be a prolonged period of
a. inflation whenever supply increases. b. production below potential GDP. c. production above potential GDP. d. rapid price increases when demand changes.