Consumer And Producer Surplus Flashcards
1
Q
Demand curve is equal to the…
A
Marginal benefit curve
2
Q
What does the demand curve tell us?
A
How much most consumers are willing to pay
3
Q
What is the law of diminishing marginal utility
A
As you consume more of a good, the marginal utility from an additional unit will decrease
4
Q
What is marginal utility
A
Additional benefit from consuming an extra unit
5
Q
What is total utility
A
Total benefit
6
Q
What is consumer surplus
A
The difference between how much consumers are willing to pay and how much they actually pay
7
Q
What is marginal cost
A
The benefit from producing an extra unit
8
Q
What is producer surplus
A
The difference between what producers are willing to sell for and what they actually sell for.
