FIGURE 5-5 -Refer to Figure 5-5.At the Market-Clearing Price and Quantity of Quantity

question 119

Multiple Choice

FIGURE 5-5
-Refer to Figure 5-5.At the market-clearing price and quantity of $30 per hour and 4000 hours of gardening services purchased,the economic surplus is

• A)the sum of the areas below the demand curve,but above the market-clearing price of $30 - i.e.,areas 1,2,6.
• B)the sum of the areas below the demand curve - i.e.,areas 1,2,3,4,5,6,7,8,9.
• C)the sum of the areas above the supply curve,but below the market-clearing price of $30 - i.e.,areas 3,4,7.
• D)the sum of the areas above the supply curve and below the demand curve - i.e.,areas 1,2,3,4,6,7.
• E)the sum of the areas below the demand curve,up to 4000 hours - i.e.,areas 1,2,3,4,5,6,7,8.

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Definitions:

Biweekly

Occurring every two weeks; often used to describe payroll or reporting periods.

Employer's Annual Contribution

The total amount an employer contributes to their employees' benefits, pensions, or other compensation plans over one year.

Piecewise Function

A function defined by multiple sub-functions, each of which applies to a certain interval of the main function's domain.

Commission

A fee paid to an agent or employee for transacting a piece of business or performing a service, typically a percentage of the sale.