Multiple Choice
If consumers cannot resell products, how does this affect the measurement of consumer surplus in a market?
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5. Consumer and Producer Surplus; Price Ceilings and Floors
Consumer Surplus and Willingness to Pay
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
The personal likes and dislikes that make buyers more or less inclined to purchase a good are known as:
A
Preferences
B
Consumer surplus
C
Willingness to pay
D
Market demand
Verified step by step guidance1
Understand that the question is asking for the term that describes the individual tastes or inclinations that affect a buyer's decision to purchase a good.
Recall that in microeconomics, 'preferences' refer to the personal likes and dislikes that influence consumer choices between different goods and services.
Recognize that 'consumer surplus' is the difference between what a consumer is willing to pay and what they actually pay, which is related but not the same as preferences.
Note that 'willingness to pay' measures the maximum amount a consumer is ready to pay for a good, which depends on preferences but is a distinct concept.
Understand that 'market demand' aggregates all individual demands in the market and is influenced by preferences but is not itself the term for personal likes and dislikes.
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