Consumer Surplus Is ________

question 22

Multiple Choice

Consumer surplus is ________.

• A) the difference between the willingness to pay for a good and the price paid for the good
• B) the sum of the willingness to pay for a good and the price paid for the good
• C) the product of the willingness to pay for a good and the price paid for the good
• D) the ratio of the willingness to pay for a good to the price paid for the good

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Definitions:

Equivalent Units Of Production

A calculation used in process costing that converts partially completed goods into a number of fully completed units.

Conversion Costs

The combined costs of direct labor and manufacturing overheads incurred to convert raw materials into finished products.

Weighted-Average Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on the average cost of all units available for sale.

Equivalent Units Of Production

A concept in cost accounting used to allocate costs to partially completed goods, based on the amount of work done on them.