Amanda Buys a Ruby for $330 for Which She Was

question 161

Multiple Choice

Amanda buys a ruby for $330 for which she was willing to pay $340. The minimum acceptable price to the seller, Tony, was $140. Amanda experiences

• A) a consumer surplus of $10, and Tony experiences a producer surplus of $190.
• B) a producer surplus of $200, and Tony experiences a consumer surplus of $10.
• C) a consumer surplus of $670, and Tony experiences a producer surplus of $200.
• D) a producer surplus of $10, and Tony experiences a consumer surplus of $190.

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Definitions:

Expected-Rate-Of-Return

The anticipated return on an investment, predicting future profit or loss.

Interest-Rate Cost-Of-Funds

The cost incurred by a financial institution to acquire the funds that it lends out to its customers, which is often influenced by prevailing market interest rates.

Marginal Cost

The rise in cost due to the production of an extra unit of a product or service.

Marginal Benefit

Marginal benefit refers to the extra benefit received from the consumption or use of an additional unit of a good or service.