Multiple Choice
If consumers cannot resell products, how does this affect the measurement of consumer surplus in a market?
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5. Consumer and Producer Surplus; Price Ceilings and Floors
Consumer Surplus and Willingness to Pay
Multiple Choice
The personal likes and dislikes that make buyers more or less inclined to purchase a good are known as:
A
Preferences
B
Consumer surplus
C
Willingness to pay
D
Market demand
Verified step by step guidance1
Understand that the question is asking for the term that describes the individual tastes or inclinations that affect a buyer's decision to purchase a good.
Recall that in microeconomics, 'preferences' refer to the personal likes and dislikes that influence consumer choices between different goods and services.
Recognize that 'consumer surplus' is the difference between what a consumer is willing to pay and what they actually pay, which is related but not the same as preferences.
Note that 'willingness to pay' measures the maximum amount a consumer is ready to pay for a good, which depends on preferences but is a distinct concept.
Understand that 'market demand' aggregates all individual demands in the market and is influenced by preferences but is not itself the term for personal likes and dislikes.
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