The Difference Between the Highest Price a Consumer Is Willing

question 165

Multiple Choice

The difference between the highest price a consumer is willing to pay for a good and the price the consumer actually pays is called

• A)producer surplus.
• B)the substitution effect.
• C)the income effect.
• D)consumer surplus.

---

Definitions:

Allocate

The process of distributing resources or goods among various uses or individuals based on specific criteria, such as need or merit.

Marginal Change

A small incremental adjustment to a plan of action.

Incremental Adjustment

Small, gradual changes or modifications made in response to changing conditions or to improve a process or system.

Scarcity

A fundamental economic problem of having seemingly limitless human wants in a world of limited resources, leading to the necessity of making trade-offs.