Economists Generally Agree That the Goal in Developing the Concept

question 106

Multiple Choice

Economists generally agree that the goal in developing the concept of consumer surplus is to:

• A) make positive judgements about the desirability of market outcomes
• B) make normative judgements about the desirability of market outcomes
• C) measure the profit of firms producing the good
• D) assess the forgone value when the price is too high

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Definitions:

Production

The process of creating goods or services using labor, technology, materials, and other inputs.

Costs

Expenses incurred in the process of creating, manufacturing, or providing a service or product, including fixed, variable, and semi-variable costs.

Controllable Margin

Contribution margin less controllable fixed costs.

Controllable Fixed Costs

Fixed costs that management has the ability to influence or change in the short term.