49: Consumer and producer surplus

Question 1

willingness to pay

Answer 1

maximum price at which a consumer would buy a good

Question 2

consumer surplus

Answer 2

net gain from the purchase of a good = willingness to pay - price payed

Question 3

seller cost

Answer 3

lowest price a supplier is willing to sell a good at

Question 4

producer surplus

Answer 4

the net gain sellers get from selling goods = price received - cost