Basic economic True or False questions?
posted by Ruth Li .
UGHHHHH I CANNOT FIND THESE ANSWERS ANYWHERE DD;
1. On an economic supply and demand graph, consumer surplus is always located above the demand curve. True or false?
2. Wealth is destroyed when socially optimal products are created. True or false?
3. A symmetrical market exists when buyers understand the differences in products being offered by the same firm. True or false?
1) false, consumer surplus is below the demand curve, but above the price line.
2) False. Socially optimal implies that benefits from production (including any positive externalities) exceeds costs of production (including any negative externalities), ergo wealth is created.
3) Hummm, a symmetrical market is one where buyers and sellers have the same level and understanding of the product (e.g, wholesale market for wheat). As apposed to an asymmetrical market where one side (usually the seller) has more knowledge than the other. (e.g., used car sales). So, I would go with false.