QUESTION 9 Suppose Larry, Moe, and Curly are bidding in an auction for a mint-condition video of Charlie Chaplin's...

Question

Question

Answer 1

Answer #1

9. Ans: Willingness to pay

Explanation:

The maximum amount which a consumer is willing to pay for a good is called willingness to pay.

Consumer surplus is the difference between willingness to pay and what consumer actually pays.

Producer surplus is the difference between the price a producer actually receives and the price he/she is willing to accept.

Thus, option [c] is correct answer.

10. Ans: $6

Explanation:

Producer surplus is the difference between the price a producer actually receives and the price he/she is willing to accept.

Producer surplus = $16 - $10 = $10

Thus, option [b] is correct answer.

Answer 2

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