Question

No 1Heading 2 Normal Place the correct answer for each of the following in the space provided Consumer Surplus 1. According to economists, at a price equal to willingness to pay, the buyer would be Indifferent about buying the good (equaly happy buying it or keeping the money). a. True b. False 2. According to economists, which of the following is the best definition of "consumer surplus"? a. the amount a buyer is willing to pay for a good is equal to the amount actually paid b. the amount a buyer is willing to pay for a good is less than the amount actually paid c the amount a buyer is willing to pay for a good is more than the amount actually paid d. consumers' demands are less than their resources According to economists, consumer surplus does reflect economic well-being as long as which of the following is also true? a. consumers do not spend all their resources b. consumers agree on the perceived value of the goods c. policymakers avoid excessive regulation d. consumers make rational decisions Producer Surplus 4. According to economists, at a price equal to willingness to cost, the seller would be indifferent about selling his services (equally happy getting the job or using his/her time and energy for another purpose). a. True b. False 5. According to economists, which of the following is the best definition of "producer surplus"? a. the amount a seller is paid to do a job is equal to the cost of production b. the amount a seller is paid to do a job is less than the cost of production c. the amount a seller is paid to do a job is more than the cost of production d. sellers' demands for their services is greater than they can perform

Answer 1

1..)

This is : False statement.

Consumer will buy good when price coincides with willingness to pay.

2)

Answer: ( C)

Consumer surplus = willingness to pay – actual payment

Consumer surplus will be positive when wiliness to pay is greater than actual payments.