Which of the following is true of consumer surplus?
A. It is used to measure the impact of a change in price on the economic well-being of the producers.
B. It is the net gain in economic well-being associated with producing and selling the equilibrium quantity of a good.
C. It is the difference between the value that one places on a good and the price paid for the good.
D. It is graphically represented as the area under the equilibrium price and above the supply curve of a good.
Answer: C
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What does unlimited liability mean?
A) The personal assets of the owners cannot be claimed if the business is bankrupt. B) Only employees can have a claim on the assets of the business. C) The owners of the business are personally responsible for paying expenses incurred by the business. D) Anybody with a liability against a firm can claim up to three times their liability.
If Sean sells Tom a tennis racket for $50, we would expect
a. both parties to gain from this transaction. b. Sean to gain from the transaction, while Tom loses. c. Tom to gain from the transaction, while Sean loses. d. the well-being of both parties to be unchanged.