Microeconomics Producer/Consumer Surplus

Producer Surplus is the area

• Below the price and above the supply curve

• Under the supply curve

• Between the supply and demand curves

• Under the demand curve, and above the price

The area below a demand curve and above the price measures

• Producer surplus

• Willingness to pay

• Consumer surplus

• Excess supply

Other things being equal, if the price of a good falls, the consumer surplus

• May increase, decrease, or remain unchanged

• Increases

• Is unchanged

• Decreases

Yaz produces nails at a cost of $200 per ton. If he sells nails for $350 per ton, his producer surplus per ton is

• $200

• $350

• $150

• $550

In a market, total surplus is

• Greater than the sum of consumer surplus plus producer surplus

• Equal to the consumer's willingness to pay plus producer's cost

• Equal to the total cost to sellers minus the total value to buyers

• Equal to producer surplus plus consumer surplus

Which best describes consumer surplus?

• The price consumers are willing and able to pay that is above the market price

• The cost of providing a unit

• The profit made by a firm

• Non is correct

Hassan is willing to pay $20 to see the Conjuring movie for the 4th time. He finds a theater showing the movie for $5. Hassan's consumer surplus is

• $5

• $15

• $20

• $25

If you pay a price exactly equal to your willingness to pay, then

• your consumer surplus is $0

• your willingness to pay is less than your consumer surplus

• your consumer surplus is negative

• you place little value on the good

When the price is P_1, consumer surplus is

• A

• A + B

• A + B + C

• A + B + D

When the price rises from P₁ to P₂, consumer surplus

• Increases by an amount equal to A

• Decreases by an amount equal to B + C

• Increases by an amount equal to B + C

• Decreases by an amount equal to C