Fundamentals of Economics

Multiple Choice

1. The amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it

a. added benefit

b. consumer surplus

c. extraordinary affair

d. marginal surplus

e. opportunity cost

2. The amount a buyer will pay for a good

a. willingness to pay

b. true price of a good

c. inferior price

d. inelastic demand price

e. externality

3. When describing the maximum total surplus received by all members of society, we are describing

a. happy time

b. normal allocation

c. equality

d. efficiency

4. The fall in total surplus that results from a market distortion such as a tax is best described by economists

a. as a negative externality

b. as uneven allocation

c. as deadweight loss

d. as a public good/expense