Which of the following best describes a good in the context of consumer surplus and willingness to pay?

• A. A good is a service provided by the government free of charge.
• B. A good is any item that is produced but not consumed.
• C. A good is a resource that cannot be traded in markets.
• D. A good is something that a customer values and that can be bought or sold voluntarily.

Answer: (D)

Verified step by step guidance

1. Understand the concept of a 'good' in microeconomics: A good is typically defined as a tangible or intangible item that can be bought or sold in a market and provides value to consumers.
2. Recall the relationship between consumer surplus and willingness to pay: Consumer surplus is the difference between what a consumer is willing to pay for a good and what they actually pay, which implies the good must be something valued and voluntarily exchanged.
3. Evaluate each option by checking if it aligns with the idea of voluntary exchange and consumer valuation: For example, a service provided free by the government is not bought or sold, so it doesn't fit the market exchange context.
4. Recognize that a good must be something that can be traded in markets and that consumers derive value from, which excludes resources that cannot be traded or items produced but not consumed.
5. Conclude that the best description is the one stating that a good is something a customer values and can buy or sell voluntarily, as this aligns with the economic concepts of consumer surplus and willingness to pay.