Graph 7-5 -In Graph 7-5, at the Quantity Q₂

question 153

Multiple Choice

Graph 7-5

-In Graph 7-5, at the quantity Q₂:

• A) the market is in equilibrium
• B) willingness to pay is greater than willingness to sell
• C) consumer surplus plus producer surplus is maximised
• D) willingness to pay is less than willingness to sell

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Definitions:

Disposable Income

The amount of money a household has available for spending and saving after income taxes have been accounted for.

Induced Consumption

Spending induced by changes in the level of income.

Autonomous Consumption

The minimum amount that people will spend on the necessities of life.

Income

The financial gain or money received by an individual or a business from various sources like work, investments, or transfers, during a specific period.