What Does It Mean When We Say That the Tails

question 50

Multiple Choice

What does it mean when we say that the tails of the normal curve are asymptotic to the x axis?

• A) The tails get closer and closer to the x axis but never touch it.
• B) The tails get closer and closer to the x axis and eventually touch it.
• C) The tails get closer and closer to the x axis and eventually cross this axis.
• D) The tails get closer and closer to the x axis and eventually become this axis.

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Definitions:

Willingness To Pay

The maximum amount an individual is prepared to spend to procure a good or service or to avoid something undesirable.

Consumer Surplus

The split between the total amount consumers are prepared to spend on a good or service and the actual amount they spend.

Demand Curve

A diagram that displays the connection between the cost of a commodity and the level of demand for it within a set timeframe.

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive, measured above the supply curve to the equilibrium price.