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Please do the following four questions in the QB02 (I uploaded)
For the multiple choice questions, you need to explain your answer.
For example: 1. The difference between the maximum price the consumer is willing to pay and the price the consumer actually pays for a product is referred to as: A. market surplus. B. market shortage. C. consumer surplus. D. producer surplus.
Solution: Consumer surplus is defined as the difference between what you ACTUALLY pay and what you are WILLING to pay. Producer surplus is the same for what a seller is WILLING to SELL for. Market surplus and shortages occur when the price is not in equilibrium.
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