Consumer Surplus

question 104

Multiple Choice

Consumer surplus

• A)plus producer surplus is maximized when resources are used efficiently.
• B)is maximized when the market outcome is efficient.
• C)equals total revenue minus opportunity cost.
• D)equals total revenue minus marginal cost.
• E)is maximized in the short run but not in the long run.

Differentiate between types of tax authorities and their applicability.

Explain the structure and application of tax rates.

Understand requirements and regulations for tax preparers under Circular 230.

Calculate effective and average tax rates.

---

Definitions:

Coupon Rate

The annual interest rate paid by a bond issuer to its bondholders, typically expressed as a percentage of the bond's face value.

Maturity

The date on which the principal amount of a financial instrument, such as a bond or loan, becomes due and payable.

Bond Portfolios

Collections of bonds held by investors or institutions, designed to achieve certain financial goals while managing risk and return.

Indexing

The investment strategy of replicating the performance of a market index, often through passive fund management.