Which of the following tools do economists commonly use to analyze consumer and producer surplus at market equilibrium using large datasets?

• A. Personal interviews only
• B. Statistical regression analysis
• C. Random guessing
• D. Anecdotal evidence

Answer: (B)

Verified step by step guidance

1. Understand that consumer and producer surplus are measures of economic welfare that depend on market equilibrium prices and quantities.
2. Recognize that analyzing these surpluses using large datasets requires quantitative methods that can handle complex data and relationships.
3. Identify that personal interviews, random guessing, and anecdotal evidence are qualitative or non-systematic approaches, which are less suitable for large-scale data analysis.
4. Learn that statistical regression analysis is a quantitative tool that economists use to estimate relationships between variables, such as price and quantity demanded or supplied, from large datasets.
5. Conclude that statistical regression analysis allows economists to rigorously estimate consumer and producer surplus by modeling demand and supply curves and calculating areas under these curves at equilibrium.