The Gains from Trade Within a Price System Is

question 383

Multiple Choice

The gains from trade within a price system is

• A) the sum of consumer surplus and producer surplus.
• B) consumer surplus less producer surplus.
• C) consumer surplus divided by producer surplus.
• D) consumer surplus multiplied by producer surplus.

---

Definitions:

Interest

The cost of borrowing money, often expressed as a percentage of the amount borrowed, paid to the lender over a specified period.

Time-Value

The concept that money available at the present time is worth more than the same amount in the future due to its potential earning capacity.

Money

Any item that is generally acceptable to sellers in exchange for goods and services.

Present Value

A calculation of today's value of money to be received in the future or ongoing cash flows, based on a given rate of return.