Economic Surplus Quiz
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Questions and Answers

What is consumer surplus?

  • The amount that producers benefit by selling at a market price that is higher than the least that they would be willing to sell for.
  • The total welfare or total social welfare obtained by consumers.
  • The difference between the price consumers are willing to pay and the price they actually pay for a product. (correct)
  • The difference between the price producers are willing to sell for and the market price.

    • What is producer surplus?

  • The total welfare or total social welfare obtained by consumers.
  • The amount that producers benefit by selling at a market price that is higher than the least that they would be willing to sell for.
  • The difference between the price producers are willing to sell for and the market price. (correct)
  • The difference between the price consumers are willing to pay and the price they actually pay for a product.

    • What is deadweight loss?

  • The difference between the price consumers are willing to pay and the price they actually pay for a product.
  • The total welfare or total social welfare obtained by consumers.
  • A decrease in the total surplus from inefficiencies. (correct)
  • The difference between the price producers are willing to sell for and the market price.

    • What is the sum of consumer and producer surplus known as?

    <p>Social surplus</p> Signup and view all the answers

    What are the two related quantities of economic surplus?

    <p>Consumer surplus and producer surplus</p> Signup and view all the answers

    True or false: Economic surplus is also known as total welfare or total social welfare or Marshallian surplus?

    <p>True</p> Signup and view all the answers

    True or false: Consumer surplus is the monetary gain obtained by consumers because they are able to purchase a product for a price that is higher than the highest price they would be willing to pay?

    <p>False</p> Signup and view all the answers

    True or false: Producer surplus is the amount that producers benefit by selling at a market price that is higher than the least that they would be willing to sell for?

    <p>True</p> Signup and view all the answers

    True or false: The sum of consumer and producer surplus is sometimes known as social surplus or total surplus?

    <p>True</p> Signup and view all the answers

    True or false: A decrease in total surplus from inefficiencies is called deadweight loss?

    <p>True</p> Signup and view all the answers

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