A Consumer's Willingness to Pay

question 112

Multiple Choice

A consumer's willingness to pay:

• A) is the maximum price that a buyer would be willing to pay for a good or service.
• B) is the minimum price that a buyer would be willing to pay for a good or service.
• C) is his or her reserved minimum bid-price.
• D) must always equal the seller's willingness to sell.

---

Definitions:

Consumer Surplus

The disparity between the total price consumers are ready and able to pay for a service or product and what they end up paying.

International Trade

The exchange of goods and services between countries, which allows for greater variety of consumption and efficiency in production.

Trade Restrictions

Government-imposed limitations on the exchange of goods and services between countries, including tariffs, quotas, and embargoes.

Free Trade

is a policy followed by some international markets in which countries' governments do not restrict imports from, or exports to, other countries.