Subsidies Are Most Likely To

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.