The Decrease in Total Surplus That Results from a Market

question 195

Multiple Choice

The decrease in total surplus that results from a market distortion, such as a tax, is called a

• A)wedge loss.
• B)revenue loss.
• C)deadweight loss.
• D)consumer surplus loss.

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Definitions:

Consumer's Risk

The probability of accepting a lot or batch of goods that contains a greater number of defects than a predetermined level, leading to consumer dissatisfaction.

Acceptance Sampling

A statistical quality control method where a random sample of items from a lot is tested to determine the acceptance or rejection of the entire lot.

Bad Lots

Refers to batches of goods or products that do not meet the quality standards set by the manufacturer or industry.

Good Lots

In quality control, this term refers to batches of products that meet the specified quality standards.