The area between the price and the supply curve bounded on the right by the quantity sold is _________.

The area between the demand curve and the price bounded on the right by the quantity consumed is _________.

Question

The area between the price and the supply curve bounded on the right by the quantity sold is _________.

The area between the demand curve and the price bounded on the right by the quantity consumed is _________.

BlackTom AI · Accepted Answer

First, let's recall the concepts involved: Producer Surplus is the area above the supply curve and below the market price, up to the quantity sold. Consumer Surplus is the area below the demand curve and above the market price, up to the quantity consumed. Now, evaluate each option carefully.

Option 1: 'Consumer Surplus; Producer Surplus' — This is reversed. The area between price and the supply curve bounded on the right by the quantity sold correctly corresponds to producer surplus, not consumer surplus. The area between the demand curve and the price bounded on the right by the quantity consumed correctly corresponds to consumer surplus, not producer surplus. So this option swaps the two terms.

Option 2: 'Producer Surplus; Consumer Surplus' — This matches the standard definitions. The area above the supply curve and below the price up to the sold quantity is producer surplus. The area below the demand curve and above the price up to the consumed quantity is consumer surplus. The phrasing aligns with these concepts.

Option 3: 'Revenue; Expenditures' — Revenue is typically price times quantity (total receipts to sellers), and expenditures refer to spending by buyers, but neither term describes the areas in a price-quantity diagram bounded by supply or demand curves. The question specifically asks for the labeled surplus areas, not total monetary aggregates.

Option 4: 'Expenditures; Revenue' — This is also mismatched. Expenditures and revenue are macro-level monetary notions, not the geometric areas defined by supply and demand curves on a price-quantity diagram. They do not capture the surplus concepts described in the question.

In summary, the only option that correctly assigns the standard surplus areas to the described regions is Option 2, where producer surplus corresponds to the area between price and supply bounded by quantity sold, and consumer surplus corresponds to the area between demand and price bounded by quantity consumed.

econ_102_120251_245625 Week 07 Quiz

The area between the price and the supply curve bounded on the right by the quantity sold is _. The area between the demand curve and the price bounded on the right by the quantity consumed is _.

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