Producer surplus is equal to the area A) under the demand ...

[ARLKQ]

Producer surplus is equal to the area
 
  A) under the demand curve and above the supply curve.
  B) above the supply curve and below the price line.
  C) under the supply curve.
  D) under the demand curve and above the price line.

Question 2

Could the high-income Asian economies be characterized as open economies? Explain.
 
  What will be an ideal response?

[meryzewe]

Answer to Question 1

B

Answer to Question 2

There has been much debate on this subject. It is possible that high-growth Asian economies promoted their exports and severely restricted imports to protect domestic markets. In that case, their policies were not market-oriented, but instead reflected a high degree of government intervention. Alternatively, East Asian economies might not have set tough constraints on imports, but followed relatively open export promotion policies that contributed to rapid economic growth, more or less in line with market-based incentives. Examination of trade data supports the theory that East Asian economies did not close their import sectors, but rather imported quite a large amount of goods and services.