Refer to Figure 4

question 2

Multiple Choice

Refer to Figure 4.3.Which diagram most likely represents the indifference map for left shoes and right shoes?

• A) A
• B) B
• C) C
• D) D

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Definitions:

Producer Surplus

The difference between the amount producers are willing to sell their goods for and the actual amount they receive due to higher market prices.

Consumer Surplus

The gap highlighting the difference between the sum consumers intend to pay and what they actually fork out for a good or service.

Supply Curve

A graphical representation showing the relationship between the price of a product and the quantity of the product that suppliers are willing to sell.

Total Surplus

The sum of consumer surplus and producer surplus, representing the total benefit to society from the production and trade of goods and services.