7. This diagram shows the demand for trips across a bridge that spans the Hudson River. If the price of crossing the bridge is $6.00, consumer surplus is a. $22. b. $46. c. $484. d. $968.8. Which of the following statements is correct? a. The price of a good reflects its value to the consumer. b. Consumer surplus can be high for a low-priced good and low for a high-priced good. c. The price of water is low relative to that of diamonds because the government provides water at affordable rates for households as a public service. d. The water-diamond paradox shows the limitations of economic theory.9. The area underneath a demand curve down to the equilibrium price is a. always less than the area under the supply curve. b. always greater than the area under the supply curve. c. consumer surplus. d. producer surplus.10. The benefit to a producer of selling a good at the equilibrium price is called a. producer surplus. b. consumer surplus. c. welfare economies. d. efficiency gain.11. Sellers’ costs of producing various units of the good are shown by the a. height of the demand curve. b. width of the demand curve. c. width of the supply curve. d. height of the supply curve.12. Producer surplus tends to be large when a. supply is elastic. b. demand is elastic. c. supply is inelastic. d. demand is inelastic.
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