Answer to Question #95164 in Economics for Manu

Question

Which best describes consumer surplus? a. The price consumers are willing to pay for a unit b. The cost of providing a unit c. The profits made by a firm. d. The difference between the price a consumer pays for an item and the price he/she is willing to pay for it.

2. The amount by which price exceeds the seller’s reservation price is called: a. Producer Surplus b. Profit c. Consumer Surplus d. Net Surplus

3. Which of the following is the best explanation of economic surplus? a. Excess supply b. Excess demand c. Excess demand and supply d. The aggregate of consumer surplus and producer surplus.

Answer 1

1. Consumer surplus is d. The difference between the price a consumer pays for an item and the price he/she is willing to pay for it.
2. The amount by which price exceeds the seller’s reservation price is called: a. Producer Surplus.
3. The best explanation of economic surplus is d. The aggregate of consumer surplus and producer surplus.