Consumer and Producer Surplus in Market Economics Quiz
Test your knowledge on consumer surplus, producer surplus, deadweight loss, tax impact, and more in market economics with this quiz!
#1
What is consumer surplus?
The extra income producers receive from selling goods
The extra benefit consumers receive from paying a lower price than they are willing to pay
The additional cost consumers pay for goods
The total revenue generated by producers
#2
In market economics, what is the relationship between price and consumer surplus?
Consumer surplus is inversely proportional to price
Consumer surplus is directly proportional to price
Consumer surplus is unrelated to price
Consumer surplus always equals the price
#3
In market economics, what does producer surplus represent?
The profit generated by producers
The difference between the minimum price a producer is willing to accept and the actual price received
The total revenue earned by producers
The cost of production
#4
What happens to consumer surplus if the price of a good decreases?
Increases
Decreases
Remains constant
Becomes negative
#5
What is the primary factor that influences the size of producer surplus?
Consumer preferences
Government regulations
The elasticity of supply
Market demand
#6
If the government imposes a price ceiling below the equilibrium price, what is likely to happen to producer surplus?
It increases
It decreases
It remains the same
It becomes negative
#7
What does the area under the demand curve and above the market price represent in terms of consumer surplus?
Producer surplus
Deadweight loss
Consumer surplus
Equilibrium surplus
#8
Which of the following statements is true regarding the relationship between supply and producer surplus?
Producer surplus increases as supply increases
Producer surplus decreases as supply increases
Producer surplus is not affected by changes in supply
Producer surplus is inversely related to supply
#9
How is the deadweight loss related to changes in consumer and producer surplus?
Deadweight loss increases as consumer surplus increases
Deadweight loss is unrelated to changes in consumer and producer surplus
Deadweight loss decreases as producer surplus increases
Deadweight loss is the difference between the gains in consumer and producer surplus
#10
How does a subsidy affect producer surplus?
It decreases producer surplus
It increases producer surplus
It has no impact on producer surplus
It eliminates producer surplus
#11
What is the concept of allocative efficiency in the context of consumer and producer surplus?
It occurs when consumer surplus is maximized
It occurs when producer surplus is maximized
It occurs when the sum of consumer and producer surplus is maximized
It occurs when the market is in equilibrium
#12
If the government imposes a price ceiling below the equilibrium price, what is likely to happen to consumer surplus and producer surplus?
Consumer surplus increases, producer surplus decreases
Consumer surplus decreases, producer surplus increases
Both consumer and producer surplus increase
Both consumer and producer surplus decrease
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