Understanding Economic Surplus Quiz
Test your knowledge on surplus economics with questions ranging from consumer surplus to market equilibrium.
#1
What happens to economic surplus when a market reaches equilibrium?
It increases
It decreases
It remains constant
It becomes negative
#2
What is producer surplus?
The difference between total revenue and total cost
The difference between total cost and total utility
The difference between total cost and total revenue
The difference between total revenue and total expenditure
#3
What happens to consumer surplus if the price of a good decreases?
Consumer surplus increases
Consumer surplus decreases
Consumer surplus remains the same
Consumer surplus becomes negative
#4
Which of the following best describes economic surplus?
The difference between total revenue and total cost
The difference between total utility and total cost
The difference between consumer surplus and producer surplus
The difference between income and expenditure
#5
What is the formula for calculating consumer surplus?
Consumer Surplus = Total Revenue - Total Cost
Consumer Surplus = Total Utility - Total Cost
Consumer Surplus = Total Revenue - Total Expenditure
Consumer Surplus = Total Benefit - Total Cost
#6
Which of the following is NOT a factor affecting consumer surplus?
Price elasticity of demand
Consumer preferences
Price controls
Income levels
#7
How does an increase in supply affect economic surplus in a competitive market?
It decreases economic surplus
It increases economic surplus
It has no effect on economic surplus
It depends on the price elasticity of demand
#8
What is the relationship between consumer surplus and price in a market?
Consumer surplus increases as price increases
Consumer surplus decreases as price increases
Consumer surplus is not affected by price changes
Consumer surplus is directly proportional to price
#9
Which of the following statements about economic surplus is correct?
Economic surplus only represents producer welfare
Economic surplus is maximized when total revenue equals total cost
Economic surplus is the sum of consumer surplus and producer surplus
Economic surplus is independent of supply and demand
#10
In a perfectly competitive market, what condition leads to the maximization of economic surplus?
When the price is set above equilibrium
When the quantity supplied equals the quantity demanded
When there are no externalities present
When producers have market power
#11
What is the relationship between economic surplus and deadweight loss?
They are inversely related
They are directly proportional
They have no relationship
They are only observed in perfectly competitive markets
#12
Which of the following accurately describes economic efficiency?
Achieving the highest possible level of economic surplus
Maximizing government intervention in markets
Minimizing consumer surplus
Minimizing producer surplus
#13
In the context of economic surplus, what does 'allocative efficiency' refer to?
When resources are allocated to their highest-valued use
When consumers receive the most benefit from their purchases
When producers maximize their profits
When there are no externalities present in the market
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