Consumer Surplus Is

question 108

Multiple Choice

Consumer surplus is

• A)the amount by which quantity supplied exceeds quantity demanded at the current market price
• B)the amount by which quantity demanded exceeds quantity supplied at the current market price
• C)the change in total utility derived from a one-unit change in the consumption of a good
• D)the difference between the price of the good paid by the consumer and the costs of production to the seller
• E)the difference between the maximum amount that a consumer is willing to pay for a given amount of a good and the amount that the consumer actually pays

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Definitions:

FIFO

Stands for First In, First Out, an inventory valuation method where goods purchased or produced first are sold or used first.

Gross profit

The difference between revenue and the cost of goods sold (COGS), representing the profit made before deducting operating expenses.

Net income

The profit of a company after all revenues, costs, and expenses have been subtracted, indicating the actual earnings.

Periodic inventory system

An inventory accounting system where updates to inventory levels are made on a periodic basis, rather than each time a sale or purchase occurs.