Changes in Business Inventories Will Be Positive When

question 18

Multiple Choice

Changes in business inventories will be positive when

• A)production exceeds sales.
• B)production is less than sales.
• C)a trade surplus exists.
• D)a budget surplus exists.

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Definitions:

Producer Surplus

The difference between the amount producers are willing to accept for a good or service compared to what they actually receive, due to market price.

Equilibrium

refers to a state in a market where supply equals demand, and in the broader sense, it's a condition where all forces acting on a system are balanced.

Consumer Surplus

Consumer surplus is the difference between the total amount that consumers are willing and able to pay for a good or service and the total amount they actually pay.

Equilibrium

A state in a market where the quantity of goods supplied is equal to the quantity of goods demanded, with no pressure to change the price or quantity.