Economics Consumer/Producer Surplus-Chapter 4 Test

Identify which word fits this definition: the maximum price a consumer is prepared to pay for a good.

• Willingness to pay

• Individual consumer surplus

• Total consumer surplus

• Consumer surplus

Identify which word fits this definition: the net gain to an individual buyer from the purchase of a good; equal to the difference between the buyer’s willingness to pay and the price paid.

• Willingness to pay

• Individual consumer surplus

• Total consumer surplus

• Consumer surplus

Identify which word fits this definition: the sum of the individual consumer surpluses of all the buyers of a good in a market.

• Willingness to pay

• Individual consumer surplus

• Total consumer surplus

• Consumer surplus

Identify which word fits this definition: a term often used to refer both to individual consumer surplus and to total consumer surplus.

• Willingness to pay

• Individual consumer surplus

• Total consumer surplus

• Consumer surplus

Identify which word fits this definition: (of seller) the lowest price at which a seller is willing to sell a good.

• Producer surplus

• Total producer surplus

• Individual producer surplus

• Cost

Identify which word fits this definition: the net gain to an individual seller from selling a good; equal to the difference between the price received and the seller’s cost.

• Producer surplus

• Total producer surplus

• Individual producer surplus

• Cost

Identify which word fits this definition: the sum of the individual producer surpluses of all the sellers of a good in a market.

• Producer surplus

• Total producer surplus

• Individual producer surplus

• Cost

Identify which word fits this definition: a term often used to refer both to individual producer surplus and to total producer surplus.

• Producer surplus

• Total producer surplus

• Individual producer surplus

• Cost

Identify which word fits this definition: the total net gain to consumers and producers from trading in a market; the sum of the producer surplus and the consumer surplus.

• Total surplus

• Property rights

• Economic signal

• Inefficient

• Market failure

Identify which word fits this definition: the rights of owners of valuable items, whether resources or goods, to dispose of those items as they choose.

• Total surplus

• Property rights

• Economic signal

• Inefficient

• Market failure