#1
What does consumer surplus represent in microeconomics?
The difference between total revenue and total cost
The difference between what consumers are willing to pay and what they actually pay
The difference between marginal cost and marginal benefit
The difference between average revenue and average cost
#2
What is producer surplus?
The difference between total revenue and total cost
The difference between what producers are willing to accept and what they actually receive
The difference between marginal cost and marginal benefit
The difference between average revenue and average cost
#3
What does the term 'economic surplus' refer to in microeconomics?
The sum of consumer surplus and producer surplus
The total revenue generated by a firm
The total cost incurred by a firm
The total profit earned by a firm
#4
Which of the following is true about the equilibrium quantity in surplus analysis?
It is where consumer surplus equals producer surplus
It is where marginal cost equals marginal benefit
It is where supply equals demand
It is where total revenue equals total cost
#5
Which of the following is NOT a determinant of consumer surplus?
Consumer preferences
Income level
Price of related goods
Price elasticity of demand
#6
What is the formula for calculating consumer surplus on a graph?
Consumer Surplus = Price × Quantity
Consumer Surplus = (Maximum Price - Actual Price) × Quantity
Consumer Surplus = Area above the demand curve and below the market price
Consumer Surplus = Area below the demand curve and above the market price
#7
What is the relationship between consumer surplus and price elasticity of demand?
They are inversely related
They are directly related
There is no relationship between them
The relationship depends on other factors
#8
In surplus analysis, what does the term 'deadweight loss' refer to?
The loss of consumer surplus and producer surplus due to inefficient allocation of resources
The loss of total revenue
The loss of profit
The loss of consumer surplus
#9
Which of the following scenarios is likely to increase consumer surplus?
An increase in the price of a substitute good
A decrease in the price of the good
A decrease in consumer income
An increase in production costs
#10
What happens to consumer surplus when a price floor is implemented?
It increases
It decreases
It remains unchanged
It fluctuates unpredictably
#11
How does a technological advancement affect producer surplus?
It increases producer surplus
It decreases producer surplus
It has no effect on producer surplus
It depends on other factors
#12
Which of the following best describes the concept of producer surplus?
The difference between total revenue and total cost
The difference between what producers are willing to accept and what they actually receive
The difference between marginal cost and marginal benefit
The difference between average revenue and average cost
#13
How does a decrease in production costs affect producer surplus?
It increases producer surplus
It decreases producer surplus
It has no effect on producer surplus
It depends on other factors
#14
What is the main reason for deadweight loss in surplus analysis?
Price floors and price ceilings
Market inefficiency
Government intervention
Consumer preferences
#15
What is the relationship between consumer surplus and the demand curve?
Consumer surplus is always equal to the area under the demand curve
Consumer surplus is inversely related to the area under the demand curve
Consumer surplus is directly related to the area under the demand curve
Consumer surplus is unrelated to the demand curve
#16
What is the concept of allocative efficiency in surplus analysis?
It occurs when resources are allocated to maximize total surplus
It occurs when resources are allocated equally among consumers and producers
It occurs when resources are allocated based on consumer preferences only
It occurs when resources are allocated based on producer preferences only
#17
What happens to producer surplus when a price ceiling is implemented?
It increases
It decreases
It remains unchanged
It fluctuates unpredictably
#18
What effect does a decrease in consumer income have on consumer surplus?
It increases consumer surplus
It decreases consumer surplus
It has no effect on consumer surplus
It depends on other factors
#19
What is the main drawback of using consumer surplus as a measure of economic welfare?
It ignores producer surplus
It assumes consumer preferences remain constant
It only considers the benefit to consumers
It does not account for the total cost of production