Consumer Surplus

question 70

Multiple Choice

Consumer surplus

• A)is positive for all but the last unit purchased.
• B)for a particular unit of consumption is computed by taking the difference between demand price and market price.
• C)is the area below demand and above market price over all the units consumed.
• D)added to producer surplus provides a measure of the net gain to society from the production and consumption of the good.
• E)all of the above

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Definitions:

Capital Goods

Long-lasting goods that are used in the production of other goods or services, such as machinery, buildings, and equipment.

Consumer Goods

Goods purchased and used by consumers rather than manufacturers for producing other goods.

Wealth Of Nations

A seminal work by Adam Smith published in 1776, which is considered the foundation of modern economic theory, focusing on the factors that promote prosperity and growth in nations.

Adam Smith

An 18th-century Scottish economist and philosopher known as the father of modern economics and author of "The Wealth of Nations."