Consumer surplus is the difference between the highest price a consumer will pay and

• the market or actual price.

• the lowest price the consumer will pay.

• the cost of production.

Producer surplus is the difference between the lowest price a firm will accept and

• the cost of production.

• the market or actual price.

• What the consumer will pay.

Theresa paid $10 for a pizza when she was prepared to pay $15. Theresa's consumer surplus is

• $10.

• $15.

• impossible to calculate.

• $5.

Market equilbrium is usually efficient because

• Total surplus is maximised at equilbrium

• consumer surplus is maximised at equilbrium

• producer surplus is maximised at equilbrium

• there is no tendency to change at equilbrium.

Market failure occurs when

• total surplus is not maximised at equilibrium.

• the market is in disequibrium.

• prices are too high for everyone to afford.

• not everyone can get what they want.

A deadweight loss is created when the quantity produced and sold at equilibrium is

• not the social optimum.

• either above or below the social optimum.

Which of the following would create a DWL from overproduction?

• Negative externalities.

• Positive externalities.

• A sales tax

Which of the following would create a DWL of underproduction?

• Positive externalities

• Negative externalities.

The presence of externalities in production creates DWL because the supply curve

• reflects production costs

• fails to reflect the marginal social cost of production

• is too far to the right

Pollution taxes aim to

• make the polluter pay for the external costs of producing the good.

• ensure the polluter pays the private costs of producing the good.

• eliminate pollution.