Chapter 6- Surplus

Surplus

A situation in which quantity supplied is greater than quantity demanded

Demand

Consumer willingness and ability to buy products

​What is the relationship between total surplus and economic efficiency?

an economically efficient market will have the maximum possible total surplus given the supply and demand curves

Which of the following represents producer surplus?

B

inefficiency

getting less output from inputs that, if devoted to some other activity, would produce more output

consumer surplus

the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it

producer surplus

the amount a seller is paid for a good minus the seller's cost of providing it

deadweight loss

the loss in social surplus that occurs when a market produces an inefficient quantity

Efficiency

using resources in such a way as to maximize the production of goods and services

economic surplus

see social surplus

Which of the following best defines consumer surplus?

the social surplus minus the producer surplus

Social surplus is ________.

the sum of consumer surplus and producer surplus

social surplus

the sum of consumer surplus and producer surplus