Question

QUESTION 7 Suppose Raymond and Victoria attend a charity benefit and participate in a silent auction. Each has in mind a maximum amount that he or she will bid for an oil painting by a locally famous artist. This maximum is called a. willingness to pay. b.producer surplus. c.consumer surplus. d. deadweight loss. QUESTION 8 Producer surplus directly measures a. excess demand. b.unsold inventories. c. the well-being of sellers. d. production costs.

Answer 1

7. Suppose Raymond and Victoria attend a charity benefit and participate in a silent auction.Each has in mind a maximum amount that he or she will bid for an oil painting by a locally famous artist. This maximum is called willingness to pay i.e what amount each person is willing to pay . Hence,option(A) is correct.

8. Producer surplus directly measures the well-being of sellers. Hence,option(C) is correct.