If a Consumer Places a Value of $20 on a Particular

question 85

Multiple Choice

If a consumer places a value of $20 on a particular good and if the price of the good is $25,then the

• A)consumer has consumer surplus of $5 if he buys the good.
• B)consumer does not purchase the good.
• C)price of the good will rise due to market forces.
• D)market is out of equilibrium.

---

Definitions:

Stock Index

An indicator used to measure and report value changes in a selection of stocks, which represents a specific segment of the stock market.

Risk-Free Rate

The expected yield from an investment that carries no risk, commonly exemplified by state bonds.

Dividend

A portion of a company's earnings distributed to its shareholders, typically in the form of cash or additional shares.

Cash Settlement

The provision of some futures contracts that requires not delivery of the underlying assets but settlement according to the cash value of the asset.