If the Demand Curve Reflects Consumers' Full Willingness to Pay

question 31

Multiple Choice

If the demand curve reflects consumers' full willingness to pay, and the supply curve reflects all costs of production, then which of the following is true?

• A) The benefit surpluses shared between consumers and producers will be maximized.
• B) The benefit surpluses received by consumers and producers will be equal.
• C) There will be no consumer or producer surplus.
• D) Consumer surplus will be maximized, and producer surplus will be minimized.

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Definitions:

Scarcity

A situation in which available resources are insufficient to satisfy all wants and demands.

Recessions

Periods of temporary economic decline during which trade and industrial activities are reduced, generally identified by a fall in GDP in successive quarters.

Macroeconomics

The branch of economics that is concerned with the overall ups and downs in the economy.

Computer Engineers

Professionals who design, develop, and test computer systems and components such as processors, circuit boards, memory devices, and networks.