External Benefits Accrue

question 81

Multiple Choice

External benefits accrue:

• A)directly to the decision maker of a market exchange.
• B)indirectly to the decision maker of a market exchange.
• C)without compensation to someone other than the person who caused them.
• D)to the government without its direct intervention.

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Definitions:

Consumer Surplus

The gap between what consumers are prepared to spend on a good or service and what they end up paying.

Price

The cost at which goods or services are offered to consumers.

Surplus Amount

The excess of supply over demand in a market, resulting in downward pressure on prices.

Consumer Surplus

The discrepancy between what consumers are ready and capable of paying for a product or service and the actual amount they end up paying.