Question

Producer surplus directly measures a. the well-being of buyers and sellers. b. the well-being of society as a whole. c. the well-being of sellers. d. sellers' willingness to sell.

Answer 1

Answer:

c. the well-being of sellers.

Explanation:

A surplus is the amount by which the quantity supplied of a good exceeds the quantity demanded of the good.

Producer surplus is the amount a buyer is willing to pay for a good minus the cost of producing the good.

On the other hand, consumer surplus is the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it.

Hence, an export subsidy will increase producer surplus.

In conclusion, producer surplus directly measures the well-being of sellers.