Supply and demand curves can only reflect
a. total social costs
b. private, or internal, costs and benefits
c. external costs and benefits
d. external benefits
e. external costs
B
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Which of the following statements correctly differentiates between consumer surplus and net benefits?
A) Consumer surplus at different levels of consumption can be calculated arithmetically, whereas net benefits at different levels of consumption cannot be estimated. B) Consumer surplus at different levels of consumption cannot be estimated, whereas net benefits at different levels of consumption can be calculated arithmetically. C) Consumer surplus measures difference between willingness to pay for a good and its price, whereas net benefits measure the overall satisfaction gained from consumption of a good. D) Consumer surplus equals the overall satisfaction gained from consumption of a good, whereas net benefits measure the difference between willingness to pay for a good and its price.
If the price of a good increases, ________
A) the budget constraint shifts to the right B) the budget constraint shifts to the left C) the consumer surplus increases D) the consumer surplus decreases