Surplus

Economics items rarely ask for the definition; they hand you a graph or a policy and ask which area moved where. The reliable tell is a wedge driven between buyers and sellers — a price ceiling, floor, tax, quota, or tariff — and the answer hinges on tracking transfers versus losses. With a tariff, the higher domestic price raises producer surplus, generates government revenue on the imports that still flow, but cuts consumer surplus by more; the two triangles consumers lose that nobody else captures are the deadweight loss (a production-inefficiency triangle plus a lost-consumption triangle). Memorize that any intervention away from competitive equilibrium can only shrink total surplus, never grow it.

The classic trap is conflating the micro surpluses (consumer/producer, measured as areas) with the macro surpluses (trade, fiscal, current-account) — same word, unrelated accounting. A second trap: under a binding price ceiling, consumer surplus usually rises but the change is ambiguous — it can fall when demand is inelastic and the ceiling bites hard. Transfers reshuffle surplus; deadweight loss destroys it.