Please do the following four questions in the QB02 (I uploaded)
35 (sunk with respect to any future decision)
For the multiple choice questions, you need to explain your answer.
For example: 1. The difference between the maximum price the consumer is willing to pay and the price the consumer actually pays for a product is referred to as: A. market surplus. B. market shortage. C. consumer surplus. D. producer surplus.
Solution: Consumer surplus is defined as the difference between what you ACTUALLY pay and what you are WILLING to pay. Producer surplus is the same for what a seller is WILLING to SELL for. Market surplus and shortages occur when the price is not in equilibrium.
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