Refer to the Above Diagram,in Which Solid Arrows Reflect Real

question 63

Multiple Choice

Refer to the above diagram,in which solid arrows reflect real flows and broken arrows are monetary flows.Flow (4) might represent:

• A) the services of NASA astrophysicists.
• B) the purchase of Stealth bombers.
• C) personal income taxes.
• D) investment spending by private corporations.

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Definitions:

Producer Surplus

The difference between what producers are willing to accept for a good or service and what they actually receive, due to market prices.

Hamburgers

A popular food item made from ground meat, typically beef, placed inside a sliced bun and often accompanied by various toppings.

Producer Surplus III

The difference between what producers are willing to accept for a good or service versus what they actually receive, a measure of producer welfare.

Consumer Surplus

The gap in the aggregate amount consumers are willing and can afford to pay for a service or good versus the aggregate amount paid.