The diagram below shows a set of budget lines facing a household. FIGURE 6-7
-Refer to Figure 6-6.
A) under the demand curve to the left of Q0, but above P0.
B) under the demand curve to the left of Q0.
C) under the entire demand curve.
D) above the market price.
E) below P0 and to the left of Q0.

Question

The diagram below shows a set of budget lines facing a household.  FIGURE 6-7
-Refer to Figure 6-6.
A) under the demand curve to the left of Q0, but above P0. 
B) under the demand curve to the left of Q0. 
C) under the entire demand curve. 
D) above the market price. 
E) below P0 and to the left of Q0.

Quizplus · Accepted Answer

The area under the demand curve to the left of Q0, but above P0, represents consumer surplus, which is the difference between what consumers are willing to pay and what they actually pay.

The Diagram Below Shows a Set of Budget Lines Facing