If the Price of a Good Is Higher Than the Equilibrium

question 162

Multiple Choice

If the price of a good is higher than the equilibrium price

• A) consumer surplus is decreased and deadweight loss is increased.
• B) consumer surplus is increased and deadweight loss is decreased.
• C) producer surplus is decreased and deadweight loss is increased.
• D) producer surplus is decreased and deadweight loss is decreased.

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Definitions:

Preliminary Sums

The initial totals computed from a data set, often used in further statistical analysis.

Cross-Products

The product of elements diagonally opposite each other when considering the multiplication of two matrices or arrays, or in vectors, it refers to the vector product of two vectors.

Least-Squares Regression Line

A straight line that minimizes the sum of the squared differences between the observed values and those predicted by the line.

Regression Assumptions

Fundamental conditions that must be met for the results of a regression analysis to be valid, including linearity, independence of errors, homoscedasticity, and normality of residuals.