Figure 2-10 -Refer to Figure 2-10,Panel (A)and Panel (B).A Shift of the Shift

question 80

Multiple Choice

Figure 2-10

-Refer to Figure 2-10,Panel (a) and Panel (b) .A shift of the economy's production possibilities frontier from Panel (a) to Panel (b) could be caused by

• A)unemployment.
• B)an improvement in sofa production technology.
• C)an improvement in tractor production technology.
• D)an improvement in both sofa and tractor production technology.

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Definitions:

Consumer Surplus

The gap between what consumers are prepared to spend on a good or service and what they end up paying.

Price

The cost at which goods or services are offered to consumers.

Surplus Amount

The excess of supply over demand in a market, resulting in downward pressure on prices.

Consumer Surplus

The discrepancy between what consumers are ready and capable of paying for a product or service and the actual amount they end up paying.