The Consumer Acquires a Consumer Surplus on a Good If

question 110

Multiple Choice

The consumer acquires a consumer surplus on a good if the marginal benefit is

• A) equal to the price.
• B) greater than the price.
• C) less than the price.
• D) zero.
• E) less than the marginal cost.

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Definitions:

Cost Basis

The original value or purchase price of an asset or investment for tax purposes, adjusted for dividends, splits, and returns of capital.

Lower-of-Cost-or-Market

An accounting principle requiring inventory to be recorded at either its cost or its market value, whichever is lower.

FIFO

A method of inventory valuation where goods first purchased or produced are assumed to be sold or used first, standing for "First In, First Out".

LIFO

Last-In, First-Out (LIFO) is an inventory valuation method whereby the most recently produced or acquired items are sold, used, or disposed of first.