Consider a Market That Is in Equilibrium with a Market-Clearing

question 27

Multiple Choice

Consider a market that is in equilibrium with a market-clearing price.Economic surplus is shown by

• A)the intersection of the supply and demand curves.
• B)the area that is both below the demand curve and above the supply curve.
• C)the area that is both above the demand curve and below the supply curve.
• D)the area to the right of the market-clearing price and quantity.
• E)the area below the supply curve up to the equilibrium quantity and below the demand curve beyond the equilibrium quantity.

---

Definitions:

Female/Male Earnings Ratio

A measure comparing the average earnings of female workers to those of male workers, often utilized to highlight gender pay gaps in the workforce.

Law of Diminishing Returns

An economic principle stating that if one factor of production is increased while others remain constant, the overall returns will eventually decrease after a certain point.

Marginal Cost

The financial outlay for making one extra unit of a product or service.

Capitalist Economy

An economic system where private individuals or businesses own capital goods, and the production of goods and services is based on supply and demand.