Consumer and Producer Surplus Quiz

What is consumer surplus?

• The amount consumers pay for a good or service.

• The difference between what consumers are willing to pay and what they actually pay.

• The total revenue received by sellers.

• The equilibrium price of a good.

When a producer's marginal cost is lower than the equilibrium price, the producer experiences:

• Producer deficit

• Producer surplus

• Consumer surplus

• No surplus or deficit

At the equilibrium point in a competitive market:

• Consumer surplus is maximized, but producer surplus is zero.

• Total surplus is maximized.

• Only producer surplus is maximized.

• There is always a market shortage.

If a market is not at equilibrium, then:

• Total economic surplus is zero.

• Consumer and producer surplus are equal.

• There is a potential deadweight loss.

• Only producer surplus is affected.

Which of the following would cause a decrease in consumer surplus?

• An increase in demand

• A decrease in supply

• A surplus in the market

• A price floor below equilibrium price

Allocative efficiency is achieved in a market when:

• The sum of consumer and producer surplus is maximized.

• The market has a shortage.

• Only consumer surplus is maximized.

• Marginal cost exceeds marginal benefit.

Deadweight loss occurs when:

• Marginal benefit equals marginal cost.

• The market equilibrium is achieved.

• There is underproduction or overproduction in a market.

• Taxes are lowered on producers.

Which of the following is true in a perfectly competitive market?

• Marginal cost is always higher than marginal benefit.

• Total economic surplus is minimized.

• No individual buyer or seller can influence the price.

• Producers always experience negative surplus.

An efficient allocation of resources occurs when:

• Consumer surplus is minimized.

• The marginal benefit equals the marginal cost.

• Only producer surplus is maximized.

• The government imposes a price ceiling.

Deadweight loss represents:

• The benefit to society of a tax.

• The loss of total welfare in a market.

• The cost of consumer surplus alone.

• An increase in producer surplus.