Principles of Microeconomics Study Set 3
Quiz 7: Efficiency,Exchange,and the Invisible Hand in Action
Subsidies Are Most Likely To
Subsidies are most likely to: A) reduce consumer surplus. B) increase total economic surplus. C) reduce total economic surplus. D) leave total economic surplus unchanged,but transfer surplus from producers to consumers.
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Suppose a market is in equilibrium.The area between the market price and the supply curve is: A) the surplus loss. B) producer surplus. C) consumer surplus. D) total economic surplus.
Consumer surplus is the value of: A) consumer spending on frivolous goods. B) the cumulative difference between what consumers are willing to pay and the price they actually pay. C) the difference between the suggested retail price and the everyday low price. D) the difference between the list price and the price the consumer can negotiate.
Total economic surplus is greatest when: A) price controls keep prices low enough that most consumers can purchase the item. B) consumer surplus and producer surplus are equal. C) consumer surplus exceeds producer surplus. D) the market is in equilibrium.
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