Producer and Consumer Surplus 1.2.8

Question 1

Define the law of diminishing marginal utility

Answer 1

The more you consume, the less marginal utility you gain from consuming

Question 2

Define consumer surplus

Answer 2

The difference between what consumers are willing to pay and what they actually pay

Question 3

Define Marginal cost

Answer 3

Cost of producing each extra unit

Question 4

Define Marginal benefit

Answer 4

The utility gained from consuming an extra unit

Question 5

Define producer surplus

Answer 5

The difference between what consumers are willing to sell for and what they actually sell for