Which of the Following Products Are Likely to Yield the Greatest

question 127

Multiple Choice

Which of the following products are likely to yield the greatest amount of consumer surplus?

• A)Water.
• B)Diamonds.
• C)Ice cream.
• D)A Persian carpet.

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Definitions:

Income

Sum of money regularly obtained through one's job or investment decisions.

Expenses

Outflows or other using up of assets or incurrence of liabilities during a period from delivering or producing goods, rendering services, or carrying out other activities that constitute the entity’s ongoing major operations.

Quasilinear Preferences

A type of preference where utility is linear in one argument, allowing indifference curves to have the same slope regardless of the level of consumption of other goods.

Equivalent Variation

A measure used in economics to evaluate the change in wealth that would leave an individual's utility unchanged before and after a policy change or a price change.