Effiency of Markets

What is consumer surplus?

• Difference between the price and the seller's costs

• Total profit of the seller

• Difference between the price the buyer is willing to pay and the actual price

• Sum of all seller's costs

Which of the following factors affects the demand for a product?

• Number of sellers

• Product quality

• Production costs

• Product price

What happens to consumer surplus when the price of a good decreases?

• Consumer surplus remains unchanged

• Consumer surplus increases

• Consumer surplus decreases

• Consumer surplus disappears

Which of the following statements is true about producer surplus?

• It is the difference between price and consumer surplus

• It is the sum of all costs to the buyer

• It is the difference between the price received by the seller and his costs

• It is the total profit of the buyer

What is market efficiency?

• Price reduction

• Maximization of total surplus

• Minimization of costs

• Increase in the quantity of goods

Which of the following statements about the equilibrium price is true?

• It is fixed and does not change

• It is determined only by sellers

• It is always above the cost price

• It is established based on supply and demand

What happens when the price of a good is above equilibrium?

• Demand exceeds supply

• Consumer surplus is maximized

• Supply exceeds demand

• The market is in equilibrium

Which of the following statements about the welfare of society is true?

• It is determined only by consumer surplus

• It is maximized at the equilibrium price

• It does not depend on market prices

• It is always equal to zero

What are external effects in economics?

• Changes in prices of goods

• Changes in production costs

• Changes in supply and demand

• Impact of market decisions on third parties

Which of the following statements about free markets is true?

• They usually lead to an efficient allocation of resources

• They are controlled by the government

• They always lead to equality

• They do not depend on supply and demand