Consumer surplus measures the difference between quantity supplied and quantity demanded.
If the interest rate increases, the price of current consumption increases relative to the price of future consumption. A risk-averse individual will not be willing to pay the expected value of an investment unless the payoff is certain. There is only one efficient technique to produce a certain quantity of output. The marginal product of labor must fall over time because the labor force is increasing. The slope of an isocost line measures the marginal rate of technical substitution.