Practise reading surplus areas on demand and supply diagrams and explaining how prices, taxes and elasticity alter market welfare.
What is consumer surplus?
the amount of a consumer's income less the amount paid in income tax
the amount of a consumer's income less the amount paid for goods and services
the amount of a consumer's income received in bonuses and overtime pay
the amount a consumer is willing to pay for a product less the amount actually paid
When the price of a product changes, it usually changes the consumer surplus in the market.
Assess how variations in price elasticity of demand for a product determine the extent of changes in consumer surplus in a market.
OR
The diagram shows the demand for and supply of a product.
Which area shows producer surplus?
Option A shown in diagram
Option B shown in diagram
Option C shown in diagram
Option D shown in diagram
Assuming normal demand and supply for a product, what will definitely increase consumer surplus?
a shift in the demand curve to the left
a shift in the demand curve to the right
a shift in the supply curve to the left
a shift in the supply curve to the right
