Use the Following to Answer Question

question 78

Multiple Choice

Use the following to answer question:
-(Figure: The Gains from Trade) Look at the figure The Gains from Trade.What is the total surplus in this market when the demand curve is D₁ and the market is in equilibrium?

• A)$25.00
• B)$31.25
• C)$62.50
• D)$90.00

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Definitions:

Futures Position

Is the contractual agreement to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future.

Interest Rate Futures

Futures contracts based on an interest-bearing instrument, used to hedge against or speculate on interest rate movements.

Treasury Bonds

Long-term government bonds with maturity periods typically exceeding ten years, offering periodic interest payments.

Eurodollars

Dollar-denominated deposits at foreign banks or foreign branches of American banks.