Total surplus measures the
a. loss to buyers from paying higher prices plus the benefit to sellers from receiving lower prices.
b. buyers' willingness to pay less the sellers' costs.
c. fairness of the distribution of resources in society.
d. value to the government of goods and services sold in society.
b
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A demand curve of the form: Q = a - bP, where a and b are positive real numbers,:
A) is an upward sloping straight line. B) has a constant price elasticity of demand. C) is a downward sloping straight line. D) is a parabolic curve.
Market failures
A) prevent the price system from attaining economic efficiency. B) result in quantities and prices that are socially desirable. C) strengthen economic efficiency by forcing unprofitable firms to close. D) weaken the argument for government intervention in the economy.