What is consumer surplus? Why would policy makers be interested in consumer surplus?
What will be an ideal response?
Consumer surplus is the difference between what a consumer is willing to pay for a product and what she actually pays for the product. Since consumer surplus measures the benefit that consumers receive from a good as they themselves perceive it, it serves as a good measure of economic well-being. Thus, if policy makers care about consumer preferences, they could use this measure to make normative judgments about market outcomes.
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The income that measures a household's earnings in the absence of government redistribution is called
A) market income. B) real income. C) money income. D) cash income.
Price floors are illegal in the United States
Indicate whether the statement is true or false
Most economists agree that a large federal budget deficit has what type of effect on the economy?
Refer to the data. The Herfindahl index for this industry is:
A. 95.
B. 1,000.
C. 2,925.
D. 2,950.