Consumer Surplus

question 172

Multiple Choice

Consumer surplus

• A) equals total revenue minus marginal cost.
• B) is maximized when the market outcome is efficient.
• C) equals total revenue minus opportunity cost.
• D) plus producer surplus is maximized when resources are used efficiently.

---

Definitions:

FIFO Method

An inventory valuation method that assumes the first items placed in inventory are the first sold or used.

Process Costing

A costing method used in industries where production is continuous, allocating costs to products based on the process they go through.

Assembly Department

A segment of a manufacturing process where components are put together to assemble a final product.

Process Costing

An accounting methodology used for homogenous products, where costs are accumulated to produce an average cost per unit across the entire production process.