Multiple Choice
Consumer expectations are a determinant of which of the following?
42
views
5. Consumer and Producer Surplus; Price Ceilings and Floors
Consumer Surplus and Willingness to Pay
Struggling with Microeconomics?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
In microeconomic terms, the ability of a good or a service to satisfy wants is called:
A
consumer surplus
B
utility
C
marginal cost
D
willingness to pay
Verified step by step guidance1
Understand the key terms given in the problem: 'consumer surplus', 'utility', 'marginal cost', and 'willingness to pay'.
Recall that in microeconomics, 'utility' refers to the satisfaction or benefit a consumer derives from consuming a good or service.
Recognize that 'consumer surplus' is the difference between what consumers are willing to pay and what they actually pay, not the satisfaction itself.
Note that 'marginal cost' is the additional cost of producing one more unit of a good, which relates to production, not satisfaction.
Understand that 'willingness to pay' reflects the maximum amount a consumer is ready to pay for a good, which is related but distinct from the satisfaction (utility) gained.
14:41mWatch next
Master Consumer Surplus in a Small Setting with a bite sized video explanation from Brian
Start learningRelated Videos
Related Practice
Consumer Surplus and Willingness to Pay practice set
Problem sets built by lead tutorsExpert video explanations