Economic surplus is the difference between the total benefits (or value) received from an economic activity or decision and the total costs incurred in pursuing that activity or decision. It represents the net benefit or welfare gain that results from the activity or decision. Option A and B are incomplete definitions of economic surplus, and Option D is not related to economic surplus.

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Economic Surplus Is

Question 40

Multiple Choice

Economic surplus is:

A) the benefit gained by taking an action.
B) the price paid to take an action.
C) the difference between the benefit gained and the cost incurred of taking an action.
D) the wage someone would have to earn in order to take an action.

Correct Answer: