Question

For a normal good, an increase in consumer income will cause the market demand for the product to:

		decrease, which is a shift to the left of the demand curve.
		decrease, which is a shift to the right of the demand curve.
		increase, which is a shift to the right of the demand curve.
		increase, which is a shift to the left of the demand curve.

Producer surplus is the:

		amount by which the quantity supplied of a good exceeds the quantity demanded of a good.
		value of the sum of producers' willingness to sell a good plus the price of the good.
		value of the difference between the actual selling price of a good and the price producers are willing to sell it for on the supply curve.
		measure of how much producers value a good.

Answer 1

Whenever there is increase in the consumer income then there is a shift of the demand by the consumers for normal goods

If the good is inferior good then increase in consumer income will lead to decrease in the demand

For normal goods the demand curve will shift to the right

Hence the correct answer is option C

2

Producer surplus is from the producers perspective

It is the difference of the actual selling price of a good that producers are getting and their willing toys to sell

On demand and supply curve it is represented by the lower triangular area given below

the value when quantity supplied exceeds the quantity demanded is called the surplus not producer surplus

Hence the correct answer is option C

PCS) to s A equilibriundf) Predices Surplus = Area of fröngle AB