A Reduction in Consumer Surplus Accompanied by an Equivalent Increase

question 138

Multiple Choice

A reduction in consumer surplus accompanied by an equivalent increase in producer surplus will

• A) leave economic surplus unchanged.
• B) result in relatively higher economic surplus.
• C) result in relatively lower economic surplus.
• D) make everyone in the society worse off.
• E) make all producers better off.

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Definitions:

Coupon

The interest rate on a bond, usually expressed as a percentage of the face value and paid at regular intervals.

Semi-Annually

A period or process that occurs twice each year.

Market Price

Market price refers to the present cost at which a service or asset is available for purchase or sale in a market.

Face Value

The nominal or original value printed on a financial instrument like a bond, distinct from its market value.