The difference between the minimum price the producer is willing to accept and the price the producer actually receives for a product is referred to as:
a. market surplus.
b. market shortage.
c. consumer surplus.
d. producer surplus.
QUESTION 2The biggest advantage of capitalism is that
a. It generates wealth with the help of government intervention
b. Prices hinder in moving assets from high-value to low-value uses
c. It forces involuntary exchanges
d. It creates wealth by letting a person follow his or her own self-interest
QUESTION 3Total surplus or gains created from trade equal
a. Seller surplus
b. Buyer surplus
c. The summation of seller and buyer surplus
d. Profits earned by a firm
QUESTION 4If you are willing to purchase a house for 500,000 and you purchase the house for 500,000 . this transaction will generate:
a. There is no surplus created for either of the party.
b. 0 worth of seller surplus and unknown amount of buyer surplus.
c. 0 worth of buyer surplus and unknown amount of seller surplus.
d. No information provided.
QUESTION 5If you are willing to purchase a house for 300,000 and you purchase the house for 275,000 . this transaction will generate:
a. There is no surplus created
b. 25,000 worth of seller surplus and unknown amount of buyer surplus
c. 10,000 worth of buyer surplus and 15,000 of seller surplus
d. 25,000 worth of buyer surplus and unknown amount of seller surplus
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