Final answer:
The cost to society of an inefficiency is not called negative consumer surplus but is correctly referred to as deadweight loss. This term describes the reduction in total surplus due to market inefficiencies, resulting in lower consumer and producer surplus than could be achieved in an efficient market.
Step-by-step explanation:
The statement that the cost to society of an inefficiency is called a negative consumer surplus is false. The accurate term for the loss in social surplus that occurs when the economy produces at an inefficient quantity is called deadweight loss.
Deadweight loss represents the potential gains from trade that do not occur because of the market inefficiency. This inefficiency can lead to both consumer and producer surplus being lower than they would be in a more efficient market, as illustrated in the deadweight loss area U + W in economic models.
In cases where market inefficiencies such as price controls are present, they can prevent suppliers and demanders from making transactions that would benefit both parties. The overall effect of such inefficiencies is a reduction in total surplus, leading to both consumer and producer surplus potentially being higher if the market were operating efficiently without these price controls.