Consumer Surplus

question 20

Multiple Choice

Consumer surplus

• A)is a concept that helps us make normative statements about the desirability of market outcomes.
• B)is represented on a graph by the area below the demand curve and above the price.
• C)is a good measure of economic welfare if buyers' preferences are the primary concern.
• D)All of the above are correct.

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Definitions:

Par Value

The face value of a bond or a stock, as stated by the issuing company, which may differ from its market value.

Zero-Coupon Bond

A zero-coupon bond is a type of bond that does not pay periodic interest but is issued at a significant discount to its face value and redeemed for its full face value at maturity.

Yield To Maturity

The total return anticipated on a bond if it is held until its maturity date, accounting for interest payments and its current market price.

Rate Of Return

The accumulation or declination in an investment's value over an agreed period, indicated as a percentage of the investment’s beginning price.